Government approved setting up three new semiconductor units

The Union Cabinet has approved setting up of three semiconductor units under the 'Development of Semiconductors and Display Manufacturing Ecosystem in India'. The construction work of all three units will start within the next 100 days.

• The Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India was announced on December 21, 2021, with a budget of Rs 76,000 crore.
• In June 2023, the Union Cabinet approved Micron's proposal to establish a semiconductor unit in Sanand, Gujarat.

Now 2602 crore chips can be manufactured every year:

• A total of 2602 crore chips will be manufactured annually from these three fab centers.
• This will supply an adequate quantity of chips not only to domestic electric vehicles, automobiles, home electric appliances and defense sector companies.
• Rather, it will be India's foray into the global chips market.

New units will be set up in these cities:

• Of these three semiconductor units, the proposal to set up two semiconductor units in Gujarat and one in Assam was approved.

Semiconductor Fab with 50,000 WFSM Capacity:

• The first among the proposals approved by the Union Cabinet is the plant of Tata Group and Taiwan company Powerchip to be set up in Dholera (Gujarat). Its manufacturing capacity is 300 crore chips. There will be a total investment of Rs 91,000 crore in this.

Semiconductor ATMP Units in Assam:

• The second proposal is related to its installation in Morigaon, Assam. It will be set up by Tata Group company Tata Semiconductor Assembly and Test Private Limited (TSAT) in collaboration with a big automobile company. The name of this company has not been mentioned.
• There will be a total investment of Rs 27,000 crore on this and its capacity will be 1752 crore chips annually.

Semiconductor ATMP unit for specific chips:

• The third plant will be set up by CG Power in Sanand, Gujarat. The unit will be set up in partnership with CG Power, Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand, a semiconductor unit. 500 crore chips will have to be made here annually.
• Chips will be manufactured here for very sensitive industries like defence, space, electric vehicles, high speed trains. There will be an investment of Rs 7600 crore in this.

Government will give subsidy of Rs 59 thousand crore:

• The government will invest a total of Rs 1.26 lakh crore in the above three projects. In this, the government will provide assistance of Rs 59 thousand crore in the form of subsidy.
• In the beginning of the year 2020, the Central Government had approved the PLI scheme for the semiconductor industry with the help of Rs 76 thousand crores. So far, four companies have been given approval to set up plants.

Strategic importance of new units:

• India Semiconductor Mission has achieved four major successes in a very short time. These units will contribute to the establishment of the semiconductor ecosystem in India.
• India already has deep capabilities in chip design. With these units, our country will develop capacity in chip manufacturing (or chip fabrication).
• With the announcement on February 29, advanced packaging technologies will be developed indigenously in India.

Employment opportunities will increase:

• These units will create 20 thousand direct employment and about 60 thousand indirect employment in advanced technology works.
• These units will expedite employment generation in downstream sectors such as automotive, electronics manufacturing, telecom manufacturing, industrial manufacturing, and other semiconductor consumer industries.

Infrastructure for Semiconductor Industry:

• The semiconductor industry needs three things to thrive. Design engineers, fabrication centers and assembling, testing, marking and packaging (ATMP) companies.
• Today there are three lakh semiconductor design engineers in India.
• The latest decision of the cabinet will fulfill the shortage of fabrication centre. Whereas ATMPs have also started being installed.
• In this way India will fulfill all the needs of the semiconductor industry. With fabrication come many companies who have now started showing their interest. There are many companies manufacturing special chemicals and gases which set up their facilities at the same place where the fab units are set up.
• It is believed that wherever the semiconductor industry flourishes, the electronic industry is also established there. It is expected that many companies manufacturing electronic equipment in India will also participate.

Indian Electronic Equipment Industry Value:

• At present the market of the Indian electronic equipment industry is worth 105 billion dollars which will increase to 300 billion dollars in the next few years.
• In the past, attempts were made to tax the semiconductor industry in India in the year 1962, 1984, 2005, 2007 and 2011 but were not successful.