The Indian government’s recent decision to dedicate a significant budget to semiconductor and display manufacturing subsidies in the Interim Budget 2024 has made a strong statement. This move has attracted the attention of key stakeholders worldwide, as many international players are considering long-term investments in India. However, despite the promising budget allocation, industry experts still have concerns.
One of the main concerns revolves around the granular distribution of the allocated amount across various semiconductor types. Industry players are particularly interested in understanding how the Rs 6,903 crore will be distributed among Si-based CMOS Fab, Compound Semiconductor Fab, Display Fab, Assembly Test and Packaging, Design Linked Incentives, and Semiconductor R&D. Each player wants to grasp the portion of the budget they can expect for their specific semiconductor projects in 2024.
Another pressing question is whether there is a long-term roadmap for budget allocation beyond 2024. This is crucial for international players who are contemplating multi-billion dollar projects that span several years in India. Political stability and clear visibility are essential for such long-term commitments, and international investors require assurance that the government will continue to support the domestic semiconductor ecosystem development beyond the current allocation period.
Furthermore, there are concerns about the sustainability of the $10 billion allocation. International players have noted that this allocation, which aims to develop the Si-based CMOS Fab, Compound Semiconductor Fab, Display Fab, and Assembly Test and Packaging unit ecosystem in India, could be depleted quickly due to the high percentage of CAPEX subsidy. The industry is keen to know if there are plans in place for further allocations beyond the initial $10 billion to scale India’s semiconductor ecosystem, as scaling is vital for survival in the semiconductor industry.
In response to these concerns, Minister Ashwini Vaishnaw and Rajeev Chandrasekhar have previously stated that the allocated amount of Rs 76,000 crore for semiconductor and display fabs is just the beginning. The government remains open to providing more incentives in the future if necessary.
Overall, the Indian government’s budget allocation for semiconductor and display manufacturing has sent a powerful message to international players. While there are lingering concerns, the government’s willingness to address these issues and provide future support is a positive sign for the growth and development of India’s semiconductor ecosystem.
FAQ Section:
1. How will the allocated budget be distributed among various semiconductor types?
Industry players are interested in understanding how the Rs 6,903 crore budget will be distributed among Si-based CMOS Fab, Compound Semiconductor Fab, Display Fab, Assembly Test and Packaging, Design Linked Incentives, and Semiconductor R&D. Each player wants to know the portion of the budget they can expect for their specific semiconductor projects in 2024.
2. Is there a long-term roadmap for budget allocation beyond 2024?
International players who are considering long-term investments in India are concerned about the availability of a long-term roadmap for budget allocation beyond 2024. Political stability and clear visibility are crucial for such long-term commitments, and investors require assurance that the government’s support for the domestic semiconductor ecosystem will continue beyond the current allocation period.
3. Is the allocated $10 billion sustainable for developing India’s semiconductor ecosystem?
There are concerns about the sustainability of the $10 billion allocation aimed at developing India’s semiconductor ecosystem. The high percentage of CAPEX subsidy raises the question of whether there are plans for further allocations beyond the initial $10 billion to scale India’s semiconductor ecosystem, as scaling is crucial for survival in the semiconductor industry.
4. Will there be additional incentives in the future?
Minister Ashwini Vaishnaw and Rajeev Chandrasekhar have stated that the allocated amount of Rs 76,000 crore is just the beginning and that the government remains open to providing more incentives in the future if necessary.
Definitions:
– Si-based CMOS Fab: Si-based CMOS Fab refers to a facility where the manufacturing of silicon-based CMOS (Complementary Metal-Oxide-Semiconductor) integrated circuits takes place.
– Compound Semiconductor Fab: Compound Semiconductor Fab refers to a facility where the manufacturing of compound semiconductors, which are composed of multiple elements, takes place.
– Display Fab: Display Fab refers to a facility where the manufacturing of display technologies, such as LCD, OLED, or LED panels, takes place.
– Assembly Test and Packaging: Assembly Test and Packaging refers to the processes involved in assembling and testing semiconductor devices after the fabrication process, as well as packaging them for final use.
– Design Linked Incentives: Design Linked Incentives refer to incentives provided by the government to encourage and support semiconductor design activities in the country.
– Semiconductor R&D: Semiconductor R&D refers to research and development activities focused on advancing semiconductor technology and materials.
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– India Gov
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