India Receives Rs 65,000 crore Investment Proposals for Semiconductor and Electronics Manufacturing Business

Introduction

The department of electronics and information technology (DeitY) has received proposals for investments worth a total of about Rs 65,000 crore in the area of semiconductor and electronics manufacturing.

Of these, proposals for investments of about Rs 13,800 crore are under an incentive scheme, and the remaining accounts for investments in two silicon wafer foundries India is looking to build. At the IESA Vision Summit 2014, the annual industry conclave of Indian Electronics and Semiconductor Association, J Satyanarayana, secretary of DeitY, said, "We have identified 2014 as 'Made in India' year. We are creating the infrastructure for the sector."

Over the past year, the government has announced a number of incentives for encouraging electronic manufacturing in the country known as Modified Special Incentive Package Scheme (M-SIPS), under which companies in certain electronic clusters will get about 25 per cent of costs as subsidies.

So far, the department has received over Rs 13,800 crore of investments proposals and cleared proposals worthRs 4,000 crore. "Many companies like Samsung and Bosch have received the approval for setting up their units in Noida.

Apart from this, government has set a corpus sum of Rs 30,000 crore for setting up electronic manufacturing clusters." IESA has been working with the government to reduce India's dependence on imports for electronic components. According to a report by IESA, the industry is expected to grow at a CAGR of 9.9 per cent to reach $94.2 billion (Rs 5.9 lakh crore) by 2015.

Currently, over 65 per cent of electronic products are imported and even the rest is mainly low-value added manufacturing. Satyanarayana stressed the need of India designing wafers. "Unless that happens, it won't give fillip to manufacturing in the country." India's first semiconductor characterisation lab is expected to come up in Bangalore in the next six months, said Omkar Rai, director-general of STPI.

Right now, 'fab-less' companies, meaning firms which don't have their own foundries, in India have to rely on countries such as Singapore or Taiwan (if there is a bulk order) for characterisation of their semicon wafers. Characterisation refers to figuring out how well a particular semiconductor design works.

The project, jointly developed by the Karnataka government, STPI and IESA, will be based on the PPP model and Bangalore-based Tessolve has been identified as the vendor to carry out this project.

Depending on the success of this lab, a second one is being planned in Bhubhaneswar and is expected to come up in a year's time. The central government has also given an in-principle nod for setting up India's first Electronic System Design and Manufacturing (ESDM) brown-field cluster in Electronic City, Bangalore at an estimated cost of Rs 85.15 crore.

Source

India Brand Equity Foundation, February 04, 2014