Lok Sabha Question No. 3422 (UNSTARRED), answered on 2023-08-09
Subject: Import Dependence of Semiconductors
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Sangeeta Azad

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 3422

TO BE ANSWERED ON: 09.08.2023

## IMPORT DEPENDENCE OF SEMICONDUCTORS

## 3422.   SHRIMATI SANGEETA AZAD:

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):  Government is focused on its objective of catalysing overall semiconductor ecosystem to further  expand  India's  already  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  INR 3.88 lakh crore (USD 60 Billion) in 2017-18 to INR 8.25 lakh crore in 2022-23 (USD 101.9 Billion)  at  a  Compound  Annual  Growth  Rate  (CAGR) of 16.28%.  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 'Atma  Nirbhar'  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 Directorate General of Commercial Intelligence & Statistics (DGCIS) portal, semiconductor chips worth INR 1,29,703 crore were imported in FY 2022-23 due to absence of commercial Fabs in India.
- (b):    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  aims  to  provide  financial  support  to  companies  investing  in semiconductors,  display  manufacturing  and  design  ecosystem.  This  will  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. ' 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' 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.

Under  the  Semicon  India  Programme,  the  proposal  of  Micron  Technology  Inc.  has  been approved  for  setting  up  a  semiconductor  ATMP  unit  in  India  with  capital  investment  of ₹22,516 crore (USD 2.75 Billion).

(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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