India Announces Rs 76,000-Crore PLI For Chipmakers
India has announced incentives worth Rs 76,000 crore to boost domestic semiconductor manufacturing as companies worldwide battle a prolonged chip crunch.
The government will provide production-linked incentives over the next six years, Ashwini Vaishnaw, electronics and IT minister, said during a cabinet briefing on Wednesday. The nation aims to develop a complete ecosystem for chip manufacturing, he said.
Through the scheme, India would be able to set up at least 15 units of compound semiconductors, and semiconductor packaging, the government said in a release.
The programme aims to provide attractive incentive support to companies that are engaged in silicon semiconductor fabrication, display fabrication, compound semiconductors / silicon photonics / sensors fabrication, semiconductor packaging and semiconductor design.
As part of the scheme, the government will provide support of up to 50% of project cost on pari-passu basis to applicants who are found eligible and have the technology to set up semiconductor and display fabrication plants in India.
The policy comes when mobile phone and appliance to carmakers grapple with a severe crunch of semiconductors, the brain behind the components, triggered by the Covid-19 pandemic. The shortage has led to intermittent production shutdowns. India has been trying to woo chipmakers to set up shop in the country for nearly two decades but this is the first time it has offered an incentive. Taiwan and South Korea are among the biggest chip manufacturers.
India, Vaishnaw said, has the largest pool of chip designers, more than 24,000.
A separate design-linked incentive scheme, according to the minister, is also set up to provide incentives to startups to design and develop chips. According to him, 50% of the design expenditure will be borne by the government as part of the DLI programme. "To aid deployment, 6% incentive will be given on sales value, which will taper down in five years."
To be sure, support will be provided to 100 domestic companies of semiconductor design for integrated circuits, chipsets, system on chips, systems and IP cores, semiconductor-linked design, and facilitating the growth of at least 20 companies which can achieve a turnover of more than Rs 1,500 crore in the coming five years.
The incentives, Vaishnaw said, are in line with those offered by other nations.