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1billion incentive per company may attract chip majors with Rs 70K crore invt

An incentive support to the tune of $1 billion per company for semiconductor manufacturing companies can give India a competitive standing against other countries and easily attract 2-3 large investments worth a cumulative Rs 70,000 to 80,000 crore, for setting up specialty fab units in India, a senior executive at US chip designer and maker Texas Instruments said.

“Today most large markets are bullish on developing a semiconductor manufacturing ecosystem within their geographies and even companies are looking to diversify their supply chains,” Rajeev Khushu, Director of Corporate Affairs & Government Relations at Texas Instruments (TI).

He added that the US government is offering incentive support of $50 billion, South Korea $100 billion and China around $450 billion.

“But the upside for India is our large consumer base, demography and the ever growing appetite for electronics and automobiles apart from a large base of semiconductor design engineers. I believe $1 billion support per player from Indian government can achieve a breakthrough by attracting 2-3 specialty fab factories in India,” Khushu, also the Chairman of the India Electronics and Semiconductor Association (IESA), said.

The Centre, in March, had invited recommendations from companies who may be interested in setting up semiconductors and display fab units in India.

TI is the world’s largest supplier of analog integrated circuits (ICs) used in consumer, computing, communications, automotive, and industrial/medical systems. As per IC insights, it ranks number one and has 19% share in analog ICs worldwide. The company has an R&D centre in India since 1985, the largest outside its headquarters in Texas.

Khushu said that leading global and domestic companies including some IESA members have submitted their expression of interest and the government is likely to announce an incentive scheme in the next five-six months.

Regarding the current chip shortage and the ongoing supply chain pressures, he said that although the demand for automotives has remained neutral, the amount of electronics that go into car manufacturing has shot up significantly.

He added that with fab expansions being announced over the past 18 months, the industry could expect the semiconductor shortage to ease out in the next three to four quarters.

As part of its initiatives to bolster India’s semiconductor industry, IESA has launched two Electropreneur Parks (EP) in Delhi and Bhubaneswar aimed at supporting and mentoring startups. The Delhi EP has on-boarded 44 startups, incubated 26 startups and 10 are in the pre-incubation stage.

“IESA has helped 18 startups to graduate, out of which 11 startups have reached the revenue stage. In terms of patents and product development, we have filed over 36 IPs and have to our credit 17 trademarks and 7 patents. The current valuation of the startups incubated stands at over INR 250 crores,” Khushu said.

It has also launched the Semiconductor Fabless Accelerator Lab (SFAL) funded by the government of Karnataka which offers financial support for prototype Silicon product development.

SFAL had so far selected 18 companies for the scheme and raised $1.6 million in funding for four companies from five VC funds so far. SFAL has created 700 direct jobs and 1000 indirect jobs so far, Khushu said. Doordarshan News

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