Govt. harmonises incentives across silicon fab manufacturing

Govt. harmonises incentives across silicon fab manufacturing

Nine months after the approval of the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India'', the government has harmonised incentives across silicon fab manufacturing. This modification will give 50 per cent incentives for semiconductor fabs across the technology nodes, display fabs, packaging and more, and will end ambiguity about different levels of incentives for different types and parts of the semiconductor ecosystem. The government has responded to the feedback received from the industry.

The Indian market, and indeed on an ongoing basis, has huge potential in India, as well as the trailing edge nodes, which are 65 nanometer nm and above. There will be no restriction on the silicon fabs on the node in terms of willingness to invest in this incentive, said Rajeev Chandrasekhar, Union Minister of State, Ministry of Electronics and Information Technology.

The buzzword in the semiconductor space has been 7 nm, 5 nm, 3 nm over the last few years and 2 nm in the near future. These are generally referred to as the leading edge nodes, which are used to power new-age flagship phones, laptops, advanced servers, and high-performance supercomputers on the cloud, to name a few. From the washing machine to fans, all other electronics use trailing edge nodes, also known as legacy nodes. With the adoption of digitisation, IoT and smart appliances, there has been a constant demand for trailing edge nodes. The most prominent fab players, from TSMC to Intel, to Samsung, are all keen to invest in legacy nodes, according to industry experts.

Even when the scheme was launched in December 2021, the Indian government s initial focus was to pick investments in the leading-edge nodes. Many manufacturers were looking at trailing edge nodes, but the difference in incentive slabs was a concern.

The minister said that the Indian market is as lucrative as it is, and that 50 to 55% of it is trailing edge nodes. This is especially in automotive, power, telecom, low-end desktops, laptops, and all of the other categories, which do not really use 7 nm or 28 nm type of semiconductors. We want to give 50% of the support to those. The incentives will help the scheme attract more investment and new applications for the semiconductor policy, and the government hopes that this move will help in the future.