Lok Sabha Question No. 5578 (UNSTARRED), answered on 2022-04-06
Subject: Semiconductor Chip Designing and Manufacturing
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Gaddam Ranjith Reddy

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 5578

TO BE ANSWERED ON: 06.04.2022

## SEMICONDUCTOR CHIP DESIGNING AND MANUFACTURING

## 5578.   DR. G. RANJITH REDDY:

Will the Minister of Electronics and Information Technology  be pleased to state:

(a)  whether the Government is aware that India is the leader only in chip designing and not in the manufacture of chips/semiconductor and if so, the details thereof;

(b)  whether semiconductor fabrication capacity and technology is available only to limited companies in the world;

(c) if so, the details of the companies that have such cutting edge technology along with the countries of their origin;

(d)  the  details  of  the  efforts  being  made  by  the  Government  through  Production  Linked Incentive (PLI), etc. to get the aforesaid technology;

(e)  the  status  of  semiconductor  manufacturing  since  mooting  the  proposal  and  bringing  it under PLI; and

(f)  the  time  by  which  the  Government  is  considering  to  get  first  semiconductor  chip manufactured in the country?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAJEEV CHANDRASEKHAR)

(a): Yes, Sir. India is one of the leading centers for global semiconductor design companies. Most global semiconductor design companies have set up design R&D innovation centers in India owing to exceptional semiconductor design talent pool making up to 20% of world's semiconductor design engineers and high number of design Patents/ IPR registered in India.

(b)  and  (c):    Semiconductor  supply  chains  are  marked  by  geographical  concentration  with 75% of global capacity in East Asia. There are only few companies that hold the cutting edge fabrication technologies in the world and the capability to establish and operate semiconductor fabs based on advanced technologies. IDMs such as Samsung (South Korea), Intel  (USA),  SK  Hynix  (South  Korea)  and  Foundries  such  as  TSMC  (Taiwan),  Global Foundries  (USA),  UMC  (Taiwan)  hold  majority  of  the  market  share  for  semiconductor fabrication.  Such  a  concentration  represents  various  risks  to  the  global  electronics  and semiconductor value chains. Building Indian capabilities in semiconductor manufacturing is an  imperative  for  industrial  growth,  digital  sovereignty,  technological  leadership,  national security, self-reliance and for India's goals to be a significant player in the global electronics and semiconductor value chains.

(d): Government  is  very  focused  on  its  important  objective of building the overall semiconductor  ecosystem  and  ensure  that,  it  in-turn  catalyses  India's  rapidly  expanding electronics  manufacturing  and  innovation  ecosystem.  The  vision  of  Atmanirbhar  Bharat  in electronics & semiconductors was given further momentum by the Union Cabinet, chaired by the Hon'ble Prime Minister, approving the Semicon India programme with a total outlay of INR  76,000  crore  for  the  development  of  semiconductor  and  display  manufacturing ecosystem in our country. The programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. This will serve to pave the way for India's growing presence in the global electronics value chains.

Following four schemes have been introduced under the aforesaid programme:

- i. Scheme for setting up of Semiconductor Fabs in India provides fiscal support to eligible applicants for setting up of Semiconductor Fabs which is aimed at attracting large  investments  for  setting  up  semiconductor  wafer  fabrication  facilities  in  the country. Following fiscal support has been approved under the scheme:
2.  28nm or Lower - Up to 50% of the Project Cost
3.  Above 28 nm to 45nm - Up to 40% of the Project Cost
4.  Above 45 nm to 65nm - Up to 30% of the Project Cost
- ii. Scheme for setting up of Display Fabs in India provides fiscal support to eligible applicants for setting up  of Display  Fabs  which  is  aimed  at  attracting  large investments for setting up TFT LCD / AMOLED based display fabrication facilities in  the  country.  The  Scheme  provides  fiscal  support  of  up  to  50%  of  Project  Cost subject to a ceiling of INR 12,000 crore per Fab.
- iii. Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India: The Scheme provides a fiscal support of 30% of the Capital Expenditure to the eligible applicants for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab and Semiconductor ATMP / OSAT facilities in India.
- iv. Design Linked Incentive (DLI) Scheme offers financial incentives, design infrastructure  support  across  various  stages  of  development  and  deployment  of semiconductor  design  for  Integrated  Circuits  (ICs),  Chipsets,  System  on  Chips (SoCs), Systems & IP Cores and semiconductor linked design. The scheme provides 'Product Design Linked Incentive' of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application and 'Deployment Linked Incentive' of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application.

In  addition  to  the  above  schemes,  Government  has  also  approved  modernization  of Semi-Conductor Laboratory (SCL), Mohali as a brownfield Fab.

In order to drive the long-term strategies for developing a sustainable semiconductors  and  display  ecosystem,  a  specialized  and  independent  'India Semiconductor  Mission  (ISM)'  has  been  set  up.  The  India  Semiconductor Mission will be led by global experts in semiconductor and display industry. It will  act  as  the  nodal  agency  for  efficient  and  smooth  implementation  of  the schemes for setting up of Semiconductor and Display Fabs.

(e)  and  (f):  Under  Semicon  India  Programme,  Government has received 3 applications for setting  up  of  Semiconductor  Fab  units  in  the  country.  The  applications  received  under  the Semicon  India  Programme  for  manufacturing  of  chips  are  under  examination.  Further, Semiconductors manufacturing is very complex and technology intensive sector with huge capital  investment,  high  risk,  long  gestation  and  payback  periods,  and  rapid  changes  in Technology which require and sustained investments. Presently, India is at formative stage of developing its semiconductor supply chain ecosystem. The manufacturing of semiconductor chips  in  semiconductor  fab  units  will  depend  on  technology,  capacity  and  availability  of semiconductor supply chain ecosystem.