Semicon India Program’s main purpose is to provide fiscal help to the firms that are well-known for investing in design ecosystem, semiconductors, and display production
The global coronavirus pandemic and the recent geopolitical backlashes has sparked the international shortage of chipsets, which has impacted numerous automobiles and smartphone companies on a massive scale. To counter this ongoing scenario, the government of India recently has unveiled the much-awaited semiconductor mission to make the country self-reliant and it will also provide an impetus to the country’s rapidly expanding innovation cluster and electronics manufacturing. To make it a reality, a production linked incentive (PLI) package of Rs 76,000 Crore was also unleashed by the government, which is also known as the Semicon India Program. With the help from an FDI, this incentive package will further boost the display and semiconductor manufacturing industry.
Semicon India Program’s main purpose is to provide fiscal help to the firms that are well-known for investing in design ecosystem, semiconductors, and display production. According to the experts, this will help the country in its escalated participation in the international electronics value chain and also pave the way for becoming a leader in international semiconductor manufacturing. The union government via India Semiconductor Mission wants to leverage the formation of a trustworthy semiconductor supply chain that comprises production equipment, raw materials, gasses, and specialty chemicals.
In fact, there is also a requirement of promoting indigenous Intellectual Property (IP) generation, incentivize, encourage, and enable Transfer of Technologies (ToT), and associations with national and global companies for skill development, commercialization, and R&D. Taiwan, which is now having the globe’s largest semiconductor foundry TSMC is also involved in a discussion with India for the formation of a semiconductor manufacturing center.
Currently, the Asian chipmakers from South Korea, Taiwan, and China have a monopoly strategy involved in their semiconductor manufacturing. During COVID-19, all these countries have faced a backlash, but now they are augmenting their chipmaking production capacities and also investing billions of dollars in their business. In the meantime, the US congress has approved the much-anticipated CHIPS and Science Act to escalate their semiconductor manufacturing with an investment around $52 billion in an effort to dominate China’s chip-making power and perk-up its own economy.
India on the other hand also joined this rat-race. During the Digital India Week 2022 conference, Narendra Modi, the Prime Minister of India mentioned that the nation now wants to turn into a “Chip Maker from a Chip Taker.” In the press conference, the Prime Minister said, “Today, India is working on the target of taking electronics manufacturing to more than $300 billion in the next 3-4 years. India wants to become a chip maker from a chip taker. Investment is increasing rapidly in India to increase the production of semiconductors.”
Amid the global competition, Karnataka also unveiled semiconductor policy in 2008-2009, and the International Semiconductor Consortium (ISMC), based in Israel signed an agreement with the state with an investment of Rs 22,900 Crore to create the nation’s first and biggest semiconductor chip manufacturing ecosystem. In fact, Gujarat couple of days back proclaimed ‘Gujarat Semiconductor Policy 2022-2027’ to magnetize investment in this category under ISM.
