The Indian government announced an ambitious production-linked incentive (PLI) scheme worth ₹76,000 crores (around $10 billion at current rates) for establishing a semiconductor ecosystem attempting to capitalize on the China Plus One sentiment that has been gathering steam in the post-pandemic world.
China Plus One refers to reducing dependency on supply chains only in China and diversifying the business into other countries. Below mentions India’s bid to finally promote semiconductor chipset manufacturing in IndiaUnsplash
- The ₹76,000 crores ($10 billion) semiconductor PLI scheme is aimed at setting up an entire ecosystem of chipset manufacturing in India.
- The government has also announced a program to create a workforce of 85,000 highly qualified engineers over the next 20 years.
- In total, the Indian government has earmarked over ₹2,30,000 crore towards various PLI schemes for electronics manufacturing.
The announcement was made at a press conference by Union Ministers Anurag Thakur, Ashwini Vaishnaw, and Gajendra Singh Shekhawat. The ministers also revealed finer details of the scheme, in addition to the fact that 85,000 engineers would be supported over the next 20 years, with Vaishnaw quipping that they are the “brains behind the chipsets”.
Semiconductor chipsets are used across a wide range of consumer electronics, including smartphones, laptops, computers, cars, smart home appliances like lights, fans, and many other things. “Going forward, any country which does not learn how to make wafers [semiconductors] will be left behind,” Vaishnaw added.
The timing of the semiconductor PLI scheme is also crucial when companies across the world have been suffering a semiconductor shortage that has been going on for several months now. At the start of November 2021, reports suggested that the government was working on details of the semiconductor PLI scheme, following that the semiconductor PLI scheme was revealed.
Highlights of Semiconductor PLI scheme
Semiconductor fabs and display fabs: Financial support of up to 50% of project cost for eligible applicants.
Semi-conductor laboratory: The electronics ministry will take the required steps for the modernization of the semiconductor laboratory.
Compound semiconductor units: Financial support of up to 30% of capital expenditure.
Semiconductor design companies: Design-linked incentives of up to 50% of eligible expenditure.
