India invests 760 billion in semiconductors-EEWORLD

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Since the previous plan to attract foreign semiconductor companies to set up factories failed due to the low subsidy ratio, the Indian government is preparing to increase the subsidy amount. According to the Economic Times of India, the Indian government plans to allocate a budget of 760 billion Indian rupees (64 billion yuan) to subsidize foreign companies to set up more than 20 semiconductor design, component manufacturing and display manufacturing plants in India in the next six years. This move will help India become an electronics manufacturing center.

The Times of India reported in early November that the Indian government is about to announce a multi-billion dollar production linkage subsidy plan to promote semiconductor manufacturing in India, and officials from multiple ministries are actively discussing with foreign semiconductor manufacturers such as TSMC, Intel, Advanced Micro Devices (AMD), Fujitsu, and UMC.

"Through various production-linked subsidy mechanisms, the Indian government is trying to broaden the scope of Indian manufacturing and exports, and the semiconductor policy will help deepen India's manufacturing base," said a senior Indian official.　

The Indian government's goals include attracting foreign investors to set up one to two display manufacturing plants, 10 semiconductor design plants and 10 component manufacturing plants each, which will pave the way for India to become an electronics manufacturing hub at a time when there is a global shortage of semiconductors.

The plan is likely to be submitted to the Indian cabinet for approval this week, after which the Ministry of Electronics and Information Technology (MeitY) will announce details of the plan and invite interested foreign companies to apply.

The Indian government invited foreign companies to set up wafer fabs in India nearly a year ago, but the move failed because the capital subsidy provided by the Indian government was only 40% at most.

Major semiconductor manufacturers including TSMC, Samsung Electronics and Intel have recently announced investment plans of more than US$10 billion. If India can attract the above-mentioned international manufacturers to set up factories in India, it will be able to reduce its dependence on imported semiconductors and help India achieve semiconductor independence.

Kanishka Chauhan, chief research analyst at market research firm Gartner, said that the semiconductor shortage has affected the production targets of almost all industries in the world, because semiconductors are used in automobiles, TVs, desktop computers, headphones, and even washing machines. The timing of the Indian government's announcement of this policy is just right. If this policy can attract some wafer foundries to set up factories in India, it will be a big step forward in promoting India's semiconductor independence.

Goal: Become a semiconductor supplier

Indian Prime Minister Narendra Modi spoke about India's digital transformation at a dialogue in November this year and stressed that the current goal is to become a major supplier of semiconductors.

According to a press release issued by the Indian Ministry of Foreign Affairs, Modi said that India is actively promoting digital transformation, with five major directions: building a complete digital public information infrastructure, using digital technology to promote good governance, developing a startup ecosystem, promoting clean energy and ecological protection, and developing 5G and 6G capabilities in the local telecommunications industry.

The press release quoted Modi as saying that India has 800 million people using the Internet, 750 million own smartphones, and the Indian government is actively working to connect 600,000 villages with broadband networks.

Modi also mentioned India's space program and cyber security protection capabilities, and said that India is currently focusing on developing hardware to pave the way for the development of the semiconductor industry.

“We are preparing incentive packages to become a major semiconductor manufacturer. Our incentive production program has attracted many domestic and foreign companies to set up bases here,” he said.

The Indian government has recently been actively attracting foreign investment to set up chip factories. Earlier, some media quoted anonymous sources as saying that New Delhi is planning to launch a multi-billion dollar production subsidy plan, and Taiwanese manufacturers are also the targets of negotiations.

However, some Taiwanese businessmen analyzed that India is not a part of the global semiconductor supply chain. For higher-end products such as chips, it is not easy to attract foreign investment in a short period of time because it is necessary to consider the overall environment such as stable water and electricity supply, upstream and downstream supply chains, and government efficiency, coupled with high investment costs.

Taiwanese businessmen said that if TSMC were to set up a factory in India, it would have to bring hundreds of suppliers with it, which would be quite difficult. Currently, India is more suitable for assembling electronic products. As for the development prospects of semiconductors, it depends on the determination of the Indian government and the implementation of relevant plans.

Keywords：semiconductor Reference address：India invests 760 billion in semiconductors

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