Government to boost funds for India Semiconductor Mission, says MeitY Secretary (2024)

The Ministry of Electronics & IT (MeitY) is likely to enhance the fund under the flagship Indian Semiconductor Mission or ISM scheme, from the current ₹ 76,000 crore, following the growing popularity worldwide.

“We can increase funding when the ISM scheme gets exhausted. If we have to bring more fabs in the country, then we may need more money, and may have to bring in more funds to this focus area,” S Krishnan, Secretary MeitY told ET.

The top official further said that in the next 2 to 3 years, the government would try to have 2-3 more semiconductor fabrication (fab) units in the country.

“Fab is a capital-intensive area, prone to cycles, and it requires a lot of patient capital and therefore the government needs to come in,” Krishnan added.

In 2021, Prime Minister Narendra Modi's government launched the India Semiconductor Mission (ISM) with an outlay of ₹76,000 crore for semiconductor manufacturing, packaging, and design units.

The scheme for setting up of semiconductor fabrication units in India offers fiscal support of up to 50% of the project cost on a pari-passu basis to the approved applicants.

Last month, the Cabinet approved three more semiconductor units in the country, including Tata’s two plants.

Industrialist Jamsetji Tata-founded Tata Group is setting up a semiconductor chip fabrication facility in Gujarat together with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC) at an investment of ₹91,000 crore, and that would have 50,000 wafer starts per month (WSPM) production capacity.

Separately, Tata Semiconductor Assembly and Test Private Limited (TSAT) said that it would set up a semiconductor unit in Assam's Morigaon at a ₹ 27,000 crore spending.

In June 2023, the Cabinet approved the proposal of US-based Micron Technology for setting up a semiconductor unit in Sanand, Gujarat.

In addition, CG Power together with Japanese Renesas Electronics Corporation and Thailand’s Stars Microelectronics would also be setting up a semiconductor facility with an investment of ₹7,600 crore.

India already has a deep capability in the chip design domain. With these units, the country would be able to develop capabilities in chip fabrication, the official said, adding that the advanced packaging technologies would be developed indigenously.

In a short span of time, India's semiconductor scheme attracted multiple large-sized multinationals, and that according to experts, would establish a semiconductor ecosystem in the country that may end the dominance of China and Taiwan in the longer term.

The government believes that these units would create at least 20,000 direct employment opportunities in advanced technology areas in addition to nearly 60,000 indirect jobs.

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