The government has received investment proposals of nearly $12 billion from companies in semiconductor equipment, materials, gases, chemicals, assembly, testing and packaging, and substrates under the second phase of the India Semiconductor Mission (ISM), Union Electronics and Information Technology Minister Ashwini Vaishnaw said.
These investments are likely to be made by the companies over the next two to three years, Vaishnaw said at a press conference during the fifth edition of Semicon India.
The second phase of ISM, which was approved by the Union Cabinet in July this year with an outlay of ₹1.27 lakh crore, proposes to cover six key areas of semiconductor chip design, materials and equipment, advanced packaging, research and development, as well as talent development.
Under ISM 2.0, the government has proposed a grant-plus-equity structure for smaller startups seeking to design strategic and commercial chips in India, ensuring that the intellectual property rights for these products remain within the country.
For medium-sized or large domestic companies that wish to enter the strategic and commercial chip design space in the country, the government has proposed a co-investment or royalty-based funding and incentive payment structure.
A flat incentive of up to 30 per cent of the project cost will be given to successful applicants for semiconductor equipment, speciality chemicals, gases and material makers willing to start manufacturing units in the country.
The incentives for setting up silicon, display and compound semiconductor fabrication units have been reduced from a flat 50 per cent under ISM 1.0 to 40 per cent for silicon semiconductor fabrication units and 35 per cent for all other semiconductor chip fabrication units under ISM 2.0.
Overall, the second phase of ISM could lead to the creation of 100,000 jobs in the Indian semiconductor ecosystem, with a lot of jobs being created by other downstream industries, Vaishnaw said.
