Govt invites proposals for setting up electronic chip plants in India, acquisition abroad

The government has invited proposals from entities to set up electronic chip manufacturing units in the country and even acquire any company making semiconductors overseas.

The expression of interest floated by the Ministry of Electronics and Information Technology (Meity) on Tuesday said that the government is keen to incentivise and attract investment in setting up semiconductor fabrication units in India.

"The Meity invites expression of interest (EoI) from companies/consortia desirous of setting up/expansion of existing Semiconductor wafer/device fabrication (FAB) facilities in India or acquisition of Semiconductor FABs outside India," the EoI document said.

Meity has fixed January 31, 2021 as the last date for submitting the proposal.

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The government plans to use the proposals to formulate a scheme for setting up or expansion of existing semiconductor plants in the country, according to the document.

Meity said the need to set up semiconductor plants assumes significance in view of the fact that India is poised to increase its share in global manufacturing of mobile phones, IT hardware, automotive electronics, industrial electronics, medical electronics, IoT, and other devices in the near future as it aspires to have $400 billion of electronics manufacturing by the year 2025.

The government had approved two semiconductor units in 2013 with an investment of around Rs 63,000 crore. However, both the units could not be setup due to lack of electronics manufacturing ecosystem in the country and policy-linked market support.

Along with the production-linked incentive scheme for electronics manufacturing, Meity had announced the scheme for promotion of manufacturing of electronic components and semiconductors (SPECS) as well with a budget outlay of Rs 3,285 crore spread over a period of eight years but no electronic chip manufacturer has shown interest in the scheme yet.

In another development, Karnataka government intends to stimulate the growth of 2,000 electronics system design and manufacturing (ESDM) startups by 2022 and create 20 lakh jobs by 2025, Deputy Chief Minister Dr C N Ashwath Narayan said on Monday.

Dr Narayan, who holds the Electronics, IT/BT portfolio, said at an event organised by the Indian Electronics Semiconductors Association (IESA) to award 'technovation' winners of the ESDM sector.

(Disclaimer: Additional background information has been added to this PTI copy for context)