Govt Kicks Off Disbursal For Micron, Tata And Others Under Semiconductor Scheme

In an effort to promote the semiconductor space, the government has reportedly started a disbursement process for US-based chipmaking giant Micron, as a part of its production-linked incentive (PLI) scheme.

“Disbursal has started for Micron, and for others, including Tata, will start now. So, we are collecting their details in terms of disbursement,” MeitY secretary S Krishnan was quoted as saying by ETTelecom.

He further told the publication that by December next year, Micron should be able to manufacture. “They have already started manufacturing in their pilot plant. Likewise, Tata has started making chips in their pilot plant which is near Bengaluru.”

The report added that under the modified assembly, testing, marking and packaging scheme, the two companies would receive 50% of the cost incurred in setting up units on a quarterly basis.

It is pertinent to note that in 2021, the government launched a PLI scheme with a budget of INR 76,000 Cr to support the semiconductor and display manufacturing ecosystem. Of this, a notable portion amounting to INR 70,000 Cr (92%) was already committed to these fab players. 

The scheme was modified in September 2022 to offer uniform support of 50% across technology nodes to attract major investors. Earlier, the fiscal support ranged from 30-50% depending on the category. 

India’s semiconductor ecosystem has gained significant traction in recent times. Earlier this year, the Union Cabinet approved three semiconductor proposals from private firms, totalling INR 1.26 Lakh Cr in investment. 

Additionally, US-based semiconductor giant Micron is in the process of establishing an ATMP plant in Gujarat, with an investment exceeding INR 22,000 Cr.

India has also inked agreements with various global semiconductor manufacturing giants to set up manufacturing units domestically. Moreover, companies like Advanced Micro Devices (AMD), Micron, and Qualcomm are also investing in India.

Meanwhile, the finance minister Nirmala Sitharaman’s Union Budget 2024-25 speech also outlined measures to boost the manufacturing ecosystem in India with the reduction in basic customs duty for inputs and raw materials used in mobile phones, electronics devices, electric vehicles (EVs), drones and semiconductors, among others.

Last year, the government set aside INR 1K Cr to fund semiconductor design startups, along with a $10 Bn allocation for semiconductor manufacturing research and design.

The development also comes on the sidelines of the Centre mulling to build a dedicated research and development unit under the proposed India Semiconductor Research Centre (ISRC).

Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) is the country’s first semiconductor fab in Gujarat’s Dholera with a net investment of INR 91,000 Cr will go into the fab.

Besides, it is also establishing a chip assembly and testing unit in Assam at an investment of INR 27,000 Cr. 

CG Power and Japan’s Renesas will set up a semiconductor plant in Gujarat’s Sanand at an estimated cost of INR 7,600 Cr, producing 15 Mn chips per day.

With the government’s push towards the Indian semiconductor ecosystem, the number of semiconductor startups in India stood at 21 at the beginning of 2023.