Lok Sabha Question No. 1654 (UNSTARRED), answered on 2022-07-27
Subject: Setting up of Semiconductor Industries
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: K. Shanmuga Sundaram

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 1654

TO BE ANSWERED ON: 27.07.2022

## SETTING UP OF SEMICONDUCTOR INDUSTRIES

## 1654.     SHRI SHANMUGA SUNDARAM K.:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:

- (a)  the  details  of  the  steps  taken  by  the  Government  to  promote  the  setting  up  of Semiconductor industries or semiconductor hubs across the country;
- (b)  whether  the  Government  has  any  plans  to  set  up  semiconductor  hubs  near  defence corridors so as to  promote the mutual R&D of both the sectors; and
- (c)   if so, the details thereof and if not, the reasons therefor?

## ANSWER

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

(a): Government is 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. This vision of Atma Nirbhar Bharat in electronics &  semiconductors  was  given  further  momentum  with  the  approval  of  the  Semicon  India programme with a total outlay of INR 76,000 crore for the development of semiconductor and  display  manufacturing  ecosystem  by  Government  of  India.  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 are 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  modernisation  of  SemiConductor Laboratory, Mohali as a brownfield Fab.

(b)  and  (c):  Setting  up  of  Semiconductor  unit  requires  huge  investments  and  necessitates suitable  infrastructure  like  availability  of  uninterrupted  Power  and  Clean  Water.  Further, Semiconductors manufacturing is a very complex and technology-intensive sector with huge capital  investments,  high  risk,  long  gestation  and  payback  periods,  and  rapid  changes  in technology  which  require  significant  and  sustained  investments.  States  such  as  Karnataka, Telangana, Tamil Nadu, Andhra Pradesh, Madhya Pradesh, Odisha, Tripura, Punjab and UT of Dadra and Nagar Haveli and Daman & Diu have shown interest in facilitating setting up of semiconductor chip manufacturing facilities. These States have also indicated the availability of  stable  power  supply  and  sufficient  water  supply  for  chip  manufacturing  facilities. However,  the  decision  regarding  the  location  of  chip  manufacturing  facility  lies  with companies  proposing  to  setup  such  facilities  based  on  various  other  parameters  including availability of stable power supply, sufficient water supply and State Government incentives.

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