Lok Sabha Question No. 505 (UNSTARRED), answered on 2022-07-20
Subject: Import Dependence in Semiconductors
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Reddeppa Nallakonda Gari

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 505

TO BE ANSWERED ON: 20.07.2022

## IMPORT DEPENDENCE IN SEMICONDUCTORS

## 505. SHRI N. REDDEPPA:

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

- (a)  the details of the current import dependence with regard to semiconductors;
- (b)  the details of measures being taken to make India self-reliant in terms of semiconductor manufacturing along with the progress made in this regard; and
- (c)  the obstacles faced currently and the proposed measures to be taken to address them?

## ANSWER

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

(a) :  The  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.

As a  result  of  several  initiatives  taken  by  the  Government  and  efforts  of  the  industry,  the domestic production of electronic goods has increased substantially from Rs. 2,43,263 crore (USD 37 billion) in 2015-16 to Rs. 5,54,461 crore (USD 74.7 billion) in 2020-21 growing at a  Compound  Annual  Growth  Rate  (CAGR)  of  17.9%.  Many  policies  of  the  Government including the flagship Production Linked Incentive (PLI) Schemes, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, Modified Electronics Manufacturing Cluster (EMC  2.0) Scheme are major steps towards making India 'AtmaNirbhar' in electronics manufacturing.

As  semiconductors  form  a  major  part  of  all  electronic  products,  as  a  result  of  growth  in electronics manufacturing sector, semiconductor market in India has also witnessed proportionate growth over the last few years. As per the industry estimate, the semiconductor consumption in India was around INR 1.1 lakh crore in year 2020 which is being met through imports due to absence of commercial semiconductor fabs in India.

(b):  The  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.  This  vision  of  AtmaNirbharta  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 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 Rs. 15 Crore per application and 'Deployment Linked Incentive' of 6% to 4%  of  net  sales  turnover  over  5  years  subject  to  a  ceiling  of  Rs.  30  Crore  per application.

In  addition  to  the  above  schemes,  Government  has  also  approved  modernisation  of  SemiConductor Laboratory, Mohali as a brownfield Fab.

Applications  have  been  invited  under  various  schemes  for  setting  up  of  Semiconductor facilities. So far 23 applications have been received which are under evaluation.

(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. However, the Government is committed to make all round efforts to develop semiconductors and display manufacturing ecosystem in India.

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