Govt mulls raising subsidy outlay for semiconductor scheme, awaits formal fab proposal from Tower-Adani JV: Mission chief

semiconductor

Akash Tripathi, the chief executive of the India Semiconductor Mission (ISM), said the government plans to extend the scheme for setting up semiconductor chip fabrication, packaging, and other ecosystem developer companies in its second phase from the current level of Rs 76,000 crore.

He said the India Semiconductor Mission has 20 more projects being examined for approval across all domains, including fabrication, display, compound semiconductors, assembly, and testing. It has already approved five projects worth Rs 1.52 lakh crore.

The government provides a 50% subsidy, so roughly Rs 60,000 crore out of the Rs 76,000 crore has already been secured.

Tripathi said that the government is also focussed on attracting companies such as raw material suppliers, gas suppliers, and other vendors of the semiconductor ecosystem, to India and working to acquire chip fabrication and packaging units.

"We hope that we will also get more investment in this sector. Only fabs will not suffice (or) only OSATs will not suffice. So, we have this inkling that we need to support all the ecosystem components,” he said.

Several companies, including Micron, Tata-PSMC, CG Power, and Kaynes, are establishing chip units in the country. As a result, their component suppliers will also need to set up their facilities here. Recently, there has been a demand for incentives to support the ancillary semiconductor industry. The former scheme for promoting the manufacturing of electronic components and semiconductors (SPECS) also included incentives for semiconductor components.

Tripathi, who heads the Rs 75,000-crore mission, said there are around 20 additional proposals from semiconductor chip fabrication units, display fabrication companies, raw material suppliers, and chip packaging companies.

He said the ISM was considering Tower Semiconductor's proposal to set up a chip fabrication unit and that the government has sought more details from the company. However, a formal proposal by the Tower Semiconductor-Adani Group joint venture has yet to be presented before the ISM.

“The ministry (MeitY) has sought details from entities involved in the project. Tower has submitted a proposal but it has to provide details… and when it provides those details we will examine that. Right now, it is at the appraisal stage and we have sought more information from it,” Tripathi told reported on September 9.

Last week, the Maharashtra Cabinet approved a semiconductor fab unit to be set up jointly by the Adani Group and Tower Semiconductor in Panvel, near Mumbai. The unit would entail an investment of about Rs 83,947 crore ($10 billion).

He said the government plans to support the industry directly for 10 years, adding that while formulating the ISM, the government had seen double-digit overall fab units in the country.

“Under the ISM, we have almost 20 more proposals which include compound semiconductors and Outsourced Semiconductor Assembly and Test (OSAT) units among others. Now, we need to look at developing the entire semiconductor ecosystem as only having fabs or OSATs won’t suffice. There’s a need to bring up the entire ecosystem,” he said.

“Under the semicon India programme, we had envisioned 2-3 semicon fabs, 2-3 display fabs and also various compound semiconductor fabs. So, I think total numbers will be somewhere around in double digits,” he added.

Talking about the revamping plans of the government's Semiconductor Laboratory (SCL) in Mohali, Tripathi said that big private players have been keen on the project, and a request for proposal (RFP) on it will be floated very soon.

India will host the first global semiconductor industry event, Semicon India 2024, from September 11 to 13.

ICEA chairman Pankaj Mohindroo said that the mobile phone industry in India will consume the storage chips that will be made in India.