Government will ensure that setting up semiconductor fabs is followed by supply chains: Rajeev Chandrasekhar

The government will have all the issues resolved when it comes to setting up semiconductor fabrication (fab) units and take the necessary steps to ensure that the supply chains also have a footprint in India, Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, said on Wednesday.

“I think it is clear that you can’t set up a fab without a supply chain, and the government will do everything necessary to ensure that the supply chain also has a footprint in India,” Chandrasekhar told meida after the foundation stone-laying ceremony of a semiconductor facility here.

When asked about which companies are coming and whether they are being given any incentives, the Minister said that at present., the semiconductor policy does not cover incentives but hinted that the government may not be averse to providing them.

“This is not currently governed by the Semicon Policy. But it is something that the government will see and explore in the second round of semiconductor expenses that are sought by the Ministry. It may require an additional specs type of a policy to support… especially if there is a justification of a disability in that supply chain to move to India,” Chandrashekhar said.

He further noted that India has the capacity and the ability to support every semiconductor investor who wants to partner with the country.

“So, if we run out of resources in this first stage of this scheme, certainly we will go back to the Prime Minister and the government and ask for more money, and I suspect that is what is going to happen,” he said.

On Wednesday, the government laid the foundation stones for three semiconductor units, including the semiconductor fabrication facility at the Dholera Special Investment Region (DSIR), Gujarat; the Outsourced Semiconductor Assembly and Test (OSAT) facility at Morigaon, Assam; and the Outsourced Semiconductor Assembly and Test (OSAT) facility at Sanand, Gujarat, worth ₹1.25-lakh crore.

With these three units, India now has four projects (the fourth being Micron Technology in Gujarat) under the India Semiconductor Mission, in which the government is extending fiscal support of up to 50 per cent of the project cost on a pari-passu basis to the approved applicants.

It is estimated that the government is expected to spend ₹59,000 crore cumulatively on these four projects, from the corpus of ₹76,000 crore semiconductor incentive scheme announced in 2021.

“It is a big milestone for the country today. After all the scepticism about when a fab will be set up and whether the big companies will come, we still have a few more projects in the pipeline. We will have 1.8 lakh wafers per month if SCL modernisation and tower proposals are approved,” Chandrasekhar added.

The Correspondent was in Dholera, Gujarat, at the invitation of Ministry of Electronics and Information Technology

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