Last year, the government announced a new incentive scheme worth Rs 76,000 crore to boost the semiconductor ecosystem in the country.
This came on the back of the global chip shortage that has affected several industries and led to production cuts, price increases, shortages, among other issues.
The cause of the global chip crisis includes the Covid-19 pandemic and subsequent restrictions in several countries, including Taiwan, a major semiconductor hub.
The tension between US and China is also a factor since many US companies do business with Chinese companies.
Semiconductors perform a host of functions such as powering displays and transferring data. The production of laptops, tablets, smartphones, and other electronic devices has been impacted by the shortage of semiconductors.
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Demand for chips is exceeding supply, and many automobile manufacturers and consumer electronics companies across the world have said that production will be affected.
The situation worsened last year as automobile manufacturers globally had to cut output or temporarily halt production due to chip shortage.
Here is what we know about the firms that have applied for India's semiconductor incentive scheme:
India’s Semiconductor Mission with an outlay of Rs 76,000 crore announced late last year has received an encouraging response from the industry.
On Saturday, the government said it has received five applications for Semiconductor and Display Fabs with an investment of Rs 1.53 trillion.
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The policy is broadly aimed at supporting 4 "buckets" of initiatives, including Silicon (CMOS) fabs, Display fabs, Compound semiconductors and OSAT, and Design-Linked Incentives.
Without its own fab, India depends on the US, Taiwan, and Southeast Asian countries to make its chips.
India's semiconductor market stands at $15 billion in 2020 and is estimated to reach $63 billion by 2026.
Three companies, including Vedanta in a JV with Foxconn, Singapore headquartered IGSS Ventures Pte and ISMC, have submitted proposals for semiconductor facilities.
The applications have been received for setting up 28 nm to 65nm Semiconductor Fabs with capacity of approx. 120,000 wafers per month and the projected investment of $13.6 billion with $5.6 billion support from the government.
1) ISMC proposes to establish a fab at the cost of a $3 billion project and if selected, it is eligible for an incentive from the center up to $0.9 billion. The likely location is Dholera SIR in Gujarat.
2) Vedanta in a JV with Foxconn has reportedly submitted a $7.4 billion proposal for setting up a 28nm fab. If the project proposal is approved, Vedanta-Foxconn JV will qualify for up to $3.7 billion from the Union Government
3) IGSS Ventures is a technology investment holding company that also has applied for Semiconductor Fabs.
Display Fabs
Two companies -- Vedanta and Elest have submitted applications for Display Fabs with the projected investment of $6.7 billion wherein fiscal support from the Central Government is being sought for nearly $2.7 billion.
