• Recently, the Ministry of Electronics and Information Technology (MeitY) has approved a comprehensive Program for the Development of Semiconductors and Display Manufacturing Ecosystems in the country.
  • The government proposes to provide incentives worth Rs 76,000 crore for the development of semiconductors and display manufacturing ecosystems over the next six years.
  • Semiconductors
  • Any of a class of crystalline solids intermediate in electrical conductivity between a conductor and an insulator.
  • Semiconductors are employed in the manufacture of various kinds of electronic devices, including diodes, transistors, and integrated circuits. Such devices have found wide application because of their compactness, reliability, power efficiency, and low cost.
  • As discrete components, they have found use in power devices, optical sensors, and light emitters, including solid-state lasers.

Important points:

  • It would provide fiscal support of up to 50% of the project cost for setting up semiconductor and display fabrication units.
  • The Union government will work with the States to set up high-tech clusters with the required infrastructure such as land and semiconductor-grade water.
  • MeitY will take requisite steps for modernization and commercialization of Semi-conductor Laboratory (SCL).
  • MeitY will explore the possibility for the Joint Venture of SCL with a commercial fab partner to modernise the brownfield fab facility.
  • It will support fiscal support of 30% of capital expenditure to approved units.
  • At Least 15 such units of Compound Semiconductors and Semiconductor Packaging are expected to be established with Government support under this scheme.
  • The Design Linked Incentive (DLI) Scheme shall extend product design linked incentive of up to 50% of eligible expenditure and product deployment linked incentive of 6% – 4% on net sales for five years.
  • Support will be provided to 100 domestic companies of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.

Way Forward

  • Semiconductors and displays are the foundation of modern electronics driving the next phase of digital transformation under Industry 4.0.
  • The new mission should focus fiscal support, at least for now, on other parts of the chip-making chain including design centres, testing facilities, packaging etc.
  • The total outlay of Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) must be increased from the current Rs. 3300 crore, to attract the microchip giants.


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