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Are tweaking the semicon policy regularly, want more competition, more innovation

In what can be termed as a change in policy stance, the government’s Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem in the country will not have a closing date. Companies interested in applying for the scheme can do so at any point of time after assessing the opportunities.Minister of state for electronics and information technology, Rajeev Chandrasekhar, told FE that the idea behind the move is to attract more companies into setting up semiconductor fabrication, so that the market does not get dominated by a few firms.

“We want more and more competition, and more and more innovation. We are not looking at which company is applying. They have to have capital and technology partners for manufacturing technology and they can apply,” Chandrasekhar said.When the scheme was launched in December 2021, the application window was open for 45 days.Since then, this will be the second change in the scheme to make it more attractive. Last year in September, the government had made modifications in the scheme by making the fiscal support of 50% of project cost uniform across all technology nodes for setting up of semiconductor fabs. When the scheme was first launched, the government had provided for financial support of up to 50% of project cost for at least two semiconductor and two display fabs for a minimum of six years. For others, like compound semiconductors, sensor fabs etc, fiscal support of 30% was to be offered.

So far, companies such as Vedanta-Foxconn JV, IGSS Ventures and ISMC have proposed to set up chip manufacturing plants with $13.6 billion investment and also sought support of $5.6 billion from the government under the incentive scheme. The government, however, is yet to approve the proposals. There have been reports that the Vedanta-Foxconn joint venture, whose plan is to manufacture chips of 40 nanometres, has not been able to tie-up with a technology partner as yet.“We will soon approve 40 nanometers fabrication and a packaging plant,” Chandrasekhar said.“India’s first semiconductor is “not gone anywhere”. This very complex and important project was finalising its manufacturing technology license agreement which is a critical piece of what’s needed. Some of the world’s leading semicon names are advisors to India Semicon Mission and are overseeing this evaluation,” Chandrasekhar said in a tweet on Thursday.

In the semiconductor space, the government has not just created opportunities in manufacturing, design and innovation in a span of 14 months but also introduced a brand new curriculum that will be implemented in higher education systems that will deliver 85,000 highly qualified professionals.Apart from the semiconductor PLI scheme, Chandrasekhar said the government will also focus on incentive schemes for computer and devices, telecom, automotive, and IT Hardware.With regard to the revised IT Hardware PLI scheme, the government has increased the outlay by over two times to Rs 17,000 crore and will approve the revised scheme by month end, according to Chandrasekhar.

The IT hardware PLI scheme was launched to promote local manufacturing of products such as laptops, tablets, desktops, and servers. However, the companies cited lower incentives for them to start manufacturing in the first round. The ministry of electronics and information technology (MeitY) has now prepared a fresh draft of the production-linked incentive (PLI) scheme to attract global majors like Dell and HP.According to Chandrasekhar, the government’s focus is to make other PLI schemes also as successful as the scheme for smartphone manufacturing in the country. Financial Express

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