Indian govt allocates $10 billion investment for semiconductor, display manufacturing ecosystem

In a strategic move to enhance its technological capabilities, the Indian government has announced a $10 billion investment in the semiconductor and display manufacturing ecosystem.

This substantial allocation, under the Semicon India Program, reflects India's commitment to bolstering its position in global supply chains and aligning with the vision of Aatmanirbhar Bharat (Self-Reliant India).

The initiative is expected to transform India into a significant player in the global semiconductor market, which is projected to reach $110 billion by 2030.

#NewIndia has allocated USD 10 Billion to develop the semiconductor and display manufacturing ecosystem, reinforcing the vision of #AatmanirbharBharat.

Discover more here: https://t.co/q1JWurcjZ8#InvestInIndia #Semiconductors @GoI_MeitY @AshwiniVaishnaw @MakeInIndia @DPIITGoI pic.twitter.com/Sy4AB18YZF

— Invest India (@investindia) August 10, 2024

Incentives to attract major investments

The Semicon India Program includes incentives designed to attract large-scale investments. Semiconductor and display fabrication facilities across various technology nodes will receive a 50% incentive on project costs. 

The support is extended to investors in compound semiconductor and Outsourced Semiconductor Assembly and Test (OSAT) facilities, who will also receive 50% support on capital expenditures.

By providing these incentives, the Indian government aims to create a sustainable environment for the semiconductor industry, promoting self-reliance and technological leadership.

Support for domestic semiconductor ecosystem

The initiative goes beyond just attracting foreign investments; it also focuses on nurturing the domestic semiconductor ecosystem.

The government is offering up to 50% reimbursement on eligible expenditures for domestic semiconductor design companies, startups, and MSMEs.

Additionally, a deployment-linked incentive ranging from 4% to 6% of net sales turnover over five years is provided.

The support extends to design infrastructure, including access to prototyping and post-silicon validation facilities, aiming to foster innovation and growth within the country.

Focus on research, development, and workforce training

Recognizing the importance of research and development, a specialized institution will be established under the Semicon India Program.

The institution will focus on advancing research, development, and talent cultivation within the semiconductor sector. 

A comprehensive training program is also planned to develop 85,000 semiconductor engineers, ensuring that the country has a skilled workforce capable of supporting the sector's growth.