In December, 2020 the ministry of electronics and IT (Meity) had come out with an expression of interest (EoI) for setting up semiconductor fabs in India and 15-20 firms had evinced interest in setting up such units.

The government is aiming to lay the foundation of the country’s first semiconductor manufacturing unit by June-July next year and a request for proposal (RFP) will soon be floated seeking commercial bids from companies. The quantum of incentives will be decided after seeking feedback from the companies operating in this space, sources said.

“The semiconductor dream of India will be fulfilled soon. It’s the Prime Minister’s dream to have semiconductors designed and made in India. We are working on developing the complete semiconductor ecosystem – for designing, manufacturing and packaging semiconductor chips,” communications and IT minister Ashwini Vaishnaw told Financial Express. He, however, did not provide any details.

In December, 2020 the ministry of electronics and IT (Meity) had come out with an expression of interest (EoI) for setting up semiconductor fabs in India and 15-20 firms had evinced interest in setting up such units.

The need for having local chip manufacturing facilities is felt even today with the ongoing global chip shortage, which is hurting industries across sectors, as electronic items are needed in every segment these days.

“Semiconductors have been a key enabler in the advancement of electronics for the past 50 years and will continue to play an even greater role with the introduction of new technologies and applications, including internet of things (IoT), artificial intelligence, 5G, smart cars, smart factories, date centres, robotics etc,” Meity had said in the EoI for semiconductors floated in December.

Semiconductor manufacturing is a complex and research-intensive sector, requiring significant and sustained investments.

As the earlier plan of setting up semiconductor fabs failed, the government this time is ensuring that any incentive scheme should be able to address the requirements of the industry. As setting up semiconductor plants requires billions of dollars of investment, the government support should also match the investments.