Lok Sabha Question No. 5301 (UNSTARRED), answered on 2023-04-05
Subject: Semiconductor Units
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Rajiv Pratap Rudy

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 5301

TO BE ANSWERED ON: 05.04.2023

## SEMICONDUCTOR UNITS

## 5301.   SHRI RAJIV PRATAP RUDY:

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

- (a) whether it is a fact that India is aiming of becoming a key semiconductor supplier for the world;
- (b) if so, the details thereof and investment approved so far, State/UT- wise including Bihar;
- (c) the details about the number of semiconductor units and their production capacities;
- (d) the present share that India has in the global semiconductor market and revenue generated thereof; and
- (e)  whether  the  Government  is  focusing  on  any  particular  cities  to  develop  them  as semiconductor  hubs  in  the  country  and  if  so,  the  details  thereof  along  with  the  reasons therefor?

## ANSWER

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

- (a):      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. Government has approved the Semicon India  programme  with  a  total outlay of INR  76,000  crore  for  the  development  of semiconductor  and  display  manufacturing  ecosystem  in  the  country.  The  programme  has further  been  modified  in  view  of  the  aggressive  incentives  offered  by  countries  already having established semiconductor ecosystem and limited number of companies owning the advanced node technologies. The modified 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.
- (b):   Following four schemes have been introduced under the aforesaid programme:
- i. ' Modified Scheme for setting up of Semiconductor Fabs in India '  for  attracting large  investments  for  setting  up  semiconductor  wafer  fabrication  facilities  in  the country  to  strengthen  the  electronics  manufacturing  ecosystem  and  help  establish  a trusted value chain. The Scheme extends a fiscal support of 50% of the project cost on pari-passu basis for setting up of Silicon CMOS based Semiconductor Fab in India.
- ii. ' Modified  Scheme  for  setting  up  of  Display  Fabs  in  India '  for  attracting  large investments for manufacturing TFT LCD or AMOLED based display panels in the country to strengthen the electronics manufacturing ecosystem. Scheme extends fiscal support of 50% of Project Cost on pari-passu basis for setting up of Display Fabs in India.
- iii. ' Modified  Scheme  for  setting  up  of  Compound  Semiconductors  /  Silicon Photonics  /  Sensors  Fab  /  Discrete  Semiconductors  Fab  and  Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India' shall extends a fiscal support of 50% of the Capital Expenditure on Pari-passu basis for  setting  up  of  Compound  Semiconductors  /  Silicon  Photonics  (SiPh)  /  Sensors

(including  MEMS)  Fab/  Discrete  Semiconductor  Fab  and  Semiconductor  ATMP  / OSAT facilities in India.

- iv. 'Semicon  India  Future  Design:  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.

Applications received for setting up of semiconductor Fabs are currently under appraisal.

(c):          Presently,  there  is  no  commercial  semiconductor  manufacturing  Fabs  in  India. However,  Government  has  established  R&D  and  Incubator  Centres  in  Semiconductors. Currently,  following  organisations  have  facilities  for  R&D:  Semi-Conductor  Laboratory (SCL) Mohali, Gallium Arsenide Enabling Technology Centre (GAETEC), Hyderabad and Society for Integrated  Circuit  Technology  and  Applied  Research (SITAR),  Bengaluru. Additionally,

Government  has  funded  for  Establishment  of  Gallium  Nitride  (GaN)  Ecosystem  Enabling Centre and Incubator for High Power and High Frequency Electronics at IISc, Bengaluru.

- (d):    As per the industry report, Global semiconductor market was estimated USD 572 Bn in 2022 and is estimated to reach US$ 1.2 Trillion by 2030. Indian Semiconductor Market is estimated  to  be  ~USD  30  Bn  in  2023  and  is  expected  to  reach  USD  59  Bn  by  2026  and USD 109 Bn by 2030.

(e):      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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