Program for Development of Semiconductors and Display Manufacturing Ecosystem in India

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    In News 

    • The Union Cabinet approved a ?76,000 crore scheme to boost semiconductor and display manufacturing in the country.

    About the Programme

    • Program for Development of Semiconductors and Display Manufacturing Ecosystem in India aims to provide a globally competitive incentive package to companies in semiconductors and display manufacturing as well as design.
    • The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations.
    • The move aimed to provide attractive incentive support to companies/consortia engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors/Silicon Photonics/Sensors Fabs, Semiconductor Packaging and Semiconductor Design.

    Broad Components of Programme

    • Semiconductor Fabs and Display Fabs: 
      • The Scheme for Setting up of Semiconductor Fabs and Display Fabs in India shall extend fiscal support of up to 50% of project cost on the pari-passu basis to applicants who are found eligible and have the technology as well as capacity to execute such highly capital intensive and resource incentive projects. 
    • Semi-conductor Laboratory (SCL):
      • The Ministry of Electronics and Information Technology will take requisite steps for the modernization and commercialization of the Semi-conductor Laboratory (SCL).
      • MeitY will explore the possibility for the Joint Venture of SCL with a commercial fab partner to modernize the brownfield fab facility.
    • Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs and Semiconductor ATMP / OSAT Units: 
      • The Scheme for Setting up of Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs and Semiconductor ATMP / OSAT facilities in India shall extend fiscal support of 30% of capital expenditure to approved units. 
        • At least 15 such units of Compound Semiconductors and Semiconductor Packaging are expected to be established with Government support under this scheme.
    • Semiconductor Design Companies: 
      • The Design Linked Incentive (DLI) Scheme shall extend product design linked incentive of up to 50% of eligible expenditure and product deployment linked incentive of 6% – 4% on net sales for five years.
    • India Semiconductor Mission: 
      • In order to drive the long-term strategies for developing sustainable semiconductors and display ecosystem, a specialized and independent “India Semiconductor Mission (ISM)” will be set up. 
      • It will be led by global experts in the semiconductor and display industry. It will act as the nodal agency for efficient and smooth implementation of the schemes on Semiconductors and Display ecosystem.
    • Chips to start-ups’ programme:  
      • The “chips to start-ups” programme would develop 85,000 well-trained engineers.
      •  Semiconductor designers would be given the opportunity to launch start-ups. 

    Significance

    • In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure. 
    • The semiconductor scheme comes at a time when the world is witnessing a severe crunch of semiconductors.
    • The supply has been disrupted as a result of the COVID-19 pandemic, which forced many production centres to close intermittently.
    • Development of the semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain. 
    • The program will promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025.
    • The approved program will propel innovation and build domestic capacities to ensure the digital sovereignty of India.
    •  It will also create highly skilled employment opportunities to harness the demographic dividend of the country.

    Semiconductor 

    • A semiconductor is a material product usually composed of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or aluminium. Their conductivity and other properties can be altered with the introduction of impurities, called doping, to meet the specific needs of the electronic component in which it resides. 
    • Also known as semis, or chips, semiconductors can be found in thousands of products such as computers, smartphones, appliances, gaming hardware, and medical equipment.
    • These devices find widespread use in almost all industries especially in the automobile industry
    • Semiconductor chip: A semiconductor chip is an electric circuit with many components such as transistors and wiring formed on a semiconductor wafer. An electronic device comprising numerous of these components is called an “integrated circuit (IC)”. 
      • Electronic parts and components today account for 40% of the cost of a new internal combustion engine car, up from less than 20% two decades ago. Chips account for a bulk of this increase.

    Comprehensive Fiscal Support for Semiconductors and Electronics

    • The government of India has announced incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.
      • Incentive support to the tune of Rs.55,392 crore (7.5 billion USD) has been approved under PLI for Larges Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.
      •  In addition, PLI incentives to the quantum of Rs.98,000 crore (USD 13 billion) are approved for allied sectors comprising ACC battery, auto components, telecom & networking products, solar PV modules and white goods. 
      • In total, the Government of India has committed support of Rs. 2,30,000 crore (USD 30 billion) to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block.

    Source:TH