New Delhi: The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday cleared the Rs 76,000-cr incentive scheme for semiconductors, Information and Broadcasting (I&B) minister Minister Anurag Thakur informed. The nod comes almost a year after the govt sought expressions of interest from companies to this effect.
The ministry of electronics & IT (MeitY) will now work out the granular details and invite applications.
Under this scheme, India will set up more than 20 semiconductor design, components manufacturing and display fabrication (fab) units over the next six years. The new semiconductor policy will help deepen India’s manufacturing base, a senior government official had told ET prior to the approval.
As part of the scheme, apart from big companies, the govt will also seek to incentivise startups to design and make semiconductors. In all, investments worth Rs 1.7 lakh crore are expected to materialise, according to media reports.
The government’s target as of now includes one to two fab units for displays, and 10 units each for designing and producing components.
It is likely to have huge transformative power and the entire programme will generate 35,000 high-quality jobs and indirect employment for one lakh people, the govt said at a briefing following the approval.
Global industry is currently reeling from an acute shortage of semiconductor chips, which has caused production processes worldwide to go haywire and prices to jump.
Semiconductor chips are used in making a wide range of products ranging from cars to phones. In recent times, their supply has been severely disrupted owing to a host of reasons, causing a crisis in a numbers of industries including automobiles and gadgets.
These apart, many other everyday-use items such as TVs, laptops and even washing machines need semiconductors.
Fabs (also called foundries) of companies such as Taiwan Semiconductor Manufacturing Company design and produce semiconductor wafers to cater to demands from global chipmaking biggies such as Samsung and Qualcomm. Thereafter, these chipmakers test, package and sell the chips to gadget makers like Cisco Systems and Xiaomi, among others.