Indian government to offer ₹76,000 crore incentive package for semiconductor manufacturing in India, report says

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Indian government to offer ₹76,000 crore incentive package for semiconductor manufacturing in India, report says
The Indian government has plans to set up two fab units for semiconductor displays, and 10 units each for designing and manufacturing components. Unsplash
  • The Indian government is reportedly planning a ₹76,000 crore incentive package for semiconductor companies.
  • It plans to set up over 20 semiconductor units in India over the next six years.
  • The new package comes amid the global semiconductor shortage that’s affecting every major industry.
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Incentives worth ₹76,000 crore are reportedly being planned for semiconductor manufacturing in the country. The government plans to set up over 20 semiconductor design, components manufacturing, and display fabrication (fab) units in India over the next six years, according to a report by ET. This scheme is expected to be sent for approval to the Cabinet next week, and details to follow soon after.

Once the cabinet approval arrives, the semiconductor policy will be made and applications sent for companies to invest. The Indian government has plans to set up two fab units for semiconductor displays, and 10 units each for designing and manufacturing components. This could pave the way for India to become an electronics hub especially at a time when the semiconductor shortage is affecting industries globally.

Semiconductors are key components used in manufacturing various kinds of electronic devices. The worldwide shortage is currently affecting almost every major industry from smartphones, laptops, cars, appliances and more. This is causing a shortage of exports on units, prices going high, and a limited supply of products. According to a report by Omdia, smartphone companies are now moving to higher resolution image sensors but with fewer cameras due to the semiconductor shortage.

The semiconductor policy is said to “help deepen India’s manufacturing base,” according to the ET report. Once the cabinet approval arrives, the ministry of electronics and information technology (MeitY) will finalise the details and invite applications from interested companies, the report added. The Indian government’s previous incentive packages for semiconductor manufacturing did not see any takers so with another big package in plan, it’s interesting to see how this one pans out.

Companies like Samsung and Intel recently made some big investments in the US. Samsung announced it will build a $17 billion semiconductor factory in Texas. Intel is also spending $20 billion to build two new fab manufacturing plants in Arizona. If India too gets a global company to invest here, it would reduce dependence on importing semiconductors from outside, and also pave the way for local manufacturing in the country.

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