Cabinet clears Rs 76,000-crore incentive scheme for semiconductors

This is part of Modi government’s bid to make the country a hub for electronics. The nod comes almost a year after the govt sought expressions of interest from companies to this effect.

The ministry of electronics & IT (MeitY) will now work out the granular details and invite applications.

The new semiconductor policy will help deepen India’s manufacturing base, a senior government official had told ET prior to the approval.

As part of the scheme, the govt will seek to incentivise startups to design and make semiconductors. Investments worth Rs 1.7 lakh crore are being expected to materialise, according to media reports.

The government’s target includes one to two fab units for displays, and 10 units each for designing and manufacturing components.

Global industry is currently reeling from an acute shortage of semiconductor chips, which has caused production to go haywire and prices to jump.

Semiconductors are used for making a wide range of products ranging from cars to phones. In recent times, their supply has been severely disrupted owing to a host of reasons, causing a crisis in a numbers of industries including automobiles and gadgets.

These apart, many other everyday-use items such as TVs, laptops and even washing machines need semiconductors.

Fabs (also called foundries) of companies such as Taiwan Semiconductor Manufacturing Company design and produce semiconductor wafers to cater to demands from global chipmaking biggies such as Samsung and Qualcomm. Thereafter, chipmakers test, package and sell the chips to gadget makers like Cisco Systems and Xiaomi, among others.