Union Cabinet has approved a Memorandum of Cooperation (MoC) between India and Japan on developing a semiconductor supply chain partnership.In recent times, India is looking to establish itself as a reliable presence in the semiconductor supply chain, especially at a time when companies are looking to diversify from China, which has been the hub of electronics manufacturing.
Significance of the Present Memorandum of Cooperation
India-Japan Semiconductor Cooperation
- The Memorandum of Cooperation (MoC) between India and Japan in the semiconductor supply chain recognizes the significance of semiconductors for industry and digital advancements.
- This MoC was initially signed in July between India’s IT Ministry and Japan’s Ministry of Economy, Trade, and Industry.
India’s Semiconductor Ambitions
- India is determined to establish a dependable presence in the global semiconductor supply chain while banking on its India Semiconductor Mission, particularly as companies seek alternatives to China, post Covid pandemic.
- India has initiated a $10 billion plan to bolster local chip production, with companies like Micron Technology setting up assembly and packaging facilities in Gujarat.
India-US Collaboration in Semiconductor Industry
- India and the United States are collaborating to strengthen chip supply chains. Both the countries reaffirmed their commitment to building resilient global semiconductor supply chains.
Major Investments in India’s Semiconductor Sector
- US chip companies like Microchip Technology and AMD are investing millions of dollars in India to expand their operations and set up research and development facilities.
- Additionally, Lam Research and Applied Materials are planning substantial investments in engineering and training programs in India’s semiconductor sector.
Semiconductors
- Any of a class of crystalline solids intermediate in electrical conductivity between a conductor and an insulator.
- Semiconductors are employed in the manufacture of various kinds of electronic devices, including diodes, transistors, and integrated circuits.
- Such devices have found wide application because of their compactness, reliability, power efficiency, and low cost.
- As discrete components, they have found use in power devices, optical sensors, and light emitters, including solid-state lasers.
India Semiconductor Mission
- The ISM was launched in 2021 with a total financial outlay of Rs 76,000 crore under the aegis of the Ministry of Electronics and IT (MeitY).
- It is part of the comprehensive program for the development of sustainable semiconductor and display ecosystems in the country.
- The programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem.
Components
Scheme for setting up of Semiconductor Fabs in India
- It provides fiscal support to eligible applicants for setting up of Semiconductor Fabs which is aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country.
Scheme for setting up of Display Fabs in India
- It provides fiscal support to eligible applicants for setting up of Display Fabs which is aimed at attracting large investments for setting up TFT LCD / AMOLED based display fabrication facilities in the country.
Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India
- The Scheme provides a fiscal support of 30% of the Capital Expenditure to the eligible applicants for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab and Semiconductor ATMP / OSAT(Outsourced Semiconductor Assembly and Test) facilities in India.
Design Linked Incentive (DLI) Scheme
- DLI scheme offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.