Centre clears Rs. 76,000cr scheme to push semiconductor chip production
The Indian government on Wednesday approved a scheme worth Rs. 76,000 crore to push designing and production of semiconductor chips and display boards in the country. The ambitious project is titled Programme for Development of Semiconductors and Display Manufacturing Ecosystem. The budget will be used over the period of next six years, officials said. Here are more details on this.
Why does it matter?
- The investment is part of India's efforts to establish itself as a global electronics production hub.
- Further, it comes at a time when automakers and tech companies around the world are struggling with a semiconductor shortage.
- Semiconductors are used in the manufacturing of various electronic products including smartphones, laptops, cars, among others, and its shortage is already causing huge losses to the auto industry.
'A historic decision'
"Prime Minister Narendra Modi has taken a historic decision in the field of Electronics in which the development of a complete ecosystem could take place within the country including design, fabrication, testing, and packaging," Information Technology (IT) Minister Ashwini Vaishnaw said. "With the pace that we are moving at, in the next six years, we will reach $300 billion in electronics manufacturing," he added.
Government's take on the project
The Centre said the project will have a positive impact across different sectors and help in deeper integration to the global value chain. It would further contribute toward achieving India's goal of a $5 trillion GDP (Gross Domestic Product) by 2025. The government will also provide financial support on capital expenditure, tariff cuts on certain components, and other benefits, reports said.
Several companies have shown interest
According to a report by Reuters, several companies have shown interest in setting up semiconductor fabrication units in India. They include Tower Semiconductor, Apple's contract manufacturer Foxconn, and a Singapore-based consortium, the report added. Besides, Vedanta Group is looking to establish a display fabrication plant in India. Separately, the Tata Group is reportedly planning to set up a semiconductor assembly and testing unit.