Govt to Come Out with Incentive Schemes for Semiconductor and Display Fabs in 6 Months

The Ministry of Electronics and IT (Meity) is going to come out with incentive schemes for setting up display and semiconductor fabrication units in the country in the next six months. According to Ministry of Electronics and Information Technology (Meity) secretary Ajay Prakash Sawhney, the government is already doing the preparatory work and talking to the industry about the support required to set up the fabs. Separate expression of interests (EoIs) has been floated for display and semiconductor fabs and companies, both global and local, are showing keen interest to set up units in India.

“We are working to formalize an incentive structure for setting up display as well as semiconductor fabs in the country. In the coming six months, we will try to come out with a concrete proposal,” Sawhney told FE. He added they are getting good response from both global and local firms in response to EoIs. He, however, did not share names of companies, which have applied as part of EoI.

The government is targeting companies including Samsung, Infineon, ST Microelectronics, Panasonic, Taiwan Semiconductor Manufacturing Company (TSMC), Intel, Vanguard, Texas Instruments among others to set up their semiconductor fabs in India.

For display units, the government is seeking interest from companies to set up LCD/OLED/AMOLED/QLED based display fabrication units in India.
As per information shared by the government, displays constitute a significant portion of the total bill of materials (BoM) in electronic products. For instance, displays account for over 25% of the BoM in the case of smartphones and over 50% in the case of LCD/LED TVs.

As per a report launched by industry association ICEA, in collaboration with Grantwood Technologies, the domestic consumption of display components exceeded $5 billion in 2020 alone.

The demand for display components in India is expected to sharply rise over the next five years, which is estimated to be much greater than $10 billion in 2025, mainly resulting from the “Make-in-India” national strategy to promote electronic manufacturing.

The report highlights that India has steadily grown into a leading consumer market for display-centric products. However, India does not currently have a local display manufacturing industry and all display components have to be imported from overseas suppliers.

India has already established a substantial market pull for display components and this market pull is accelerating to be a substantial fraction of the global display industry. The creation of an India-based display industry will require the confluence of market pull, capital and know-how.

Globally, the display was a $100 billion industry in 2020 and is projected to grow over $125 billion in revenues by 2024. The mobile phone and TV product segments account for greater than 65% of the industry revenues while notebooks, monitors, tablets, automotive and other applications account for the rest.

G Rajeswaran, Director & CEO, Grantwood Technologies said, “Displays are the windows to the digital world of data. They make it possible for data to be visualized in a human-readable form. India has the market pull for display-centric electronic products, it needs a plan to bring together capital and know-how for the creation of a display manufacturing industry in India.”

India is aspiring for a more than five-fold increase in electronics manufacturing to $400 billion by FY2025, by focusing on export markets and incentivising manufacturers to become globally competitive.

Last April, the government rolled out a Rs 41,000 crore worth PLI scheme for large scale electronics manufacturing. The scheme extended incentives of 4-6% on incremental sales over the base year for goods manufactured in India for five years after the base year as defined. Another scheme for IT hardware with an outlay of Rs 7,350 crore has been launched. The government will offer incentives in the range of 4-1% over four years for manufacturing laptops, tablets, all-in-one PCs, and servers in India.

Source : FE