New Delhi,– In a significant push to bolster India’s semiconductor ecosystem, the Union Cabinet has approved the sixth project under the India Semiconductor Mission (ISM) with a total financial outlay of ₹3,706 crore. The move reinforces the government’s commitment to establishing India as a global hub for semiconductor manufacturing and design.
Key Details of the Approved Project
The latest approval is part of the Modified Scheme for Semiconductors and Display Fab Ecosystem, which aims to attract investments in semiconductor fabrication, packaging, and design. The project focuses on compound semiconductors, which are crucial for next-generation electronics, electric vehicles (EVs), and defense applications.
Under the scheme, the government will provide fiscal support of up to 50% of the project cost to eligible companies. This initiative is expected to generate thousands of high-skilled jobs and reduce India’s reliance on semiconductor imports, which currently account for nearly $10 billion in annual spending.
Strategic Importance of the Semiconductor Mission
The India Semiconductor Mission, launched in December 2021, is a cornerstone of the government’s Atmanirbhar Bharat (Self-Reliant India) initiative. With global semiconductor shortages disrupting industries worldwide, India is positioning itself as a reliable alternative to traditional manufacturing hubs like Taiwan, South Korea, and China.
The previous five projects under ISM include:
- A semiconductor fabrication unit by Tata Electronics in partnership with a global player.
- Two outsourced semiconductor assembly and test (OSAT) facilities.
- A display fabrication plant for advanced screens.
- A chip design and innovation center to boost domestic R&D.
Economic and Technological Impact
The latest approval is expected to:
✔ Boost domestic manufacturing of high-tech semiconductors used in 5G, AI, and IoT devices.
✔ Attract foreign investments from global semiconductor giants looking to diversify supply chains.
✔ Strengthen India’s EV and defense sectors, which rely heavily on specialized chips.
Union IT Minister Ashwini Vaishnaw stated, “This approval marks another milestone in India’s semiconductor journey. We are committed to creating a robust ecosystem that fosters innovation and self-reliance.”
Challenges and Future Roadmap
While the initiative has gained momentum, challenges such as high capital expenditure, skilled workforce shortages, and global competition remain. The government is addressing these through:
🔹 Skill development programs in semiconductor engineering.
🔹 Incentives for R&D to encourage indigenous innovation.
🔹 Strategic partnerships with countries like the US, Japan, and the EU under the Chip 4 Alliance framework.
Conclusion
The Cabinet’s approval of the sixth semiconductor project underscores India’s strategic focus on securing a foothold in the $500 billion global semiconductor market. With continued policy support and private-sector collaboration, the India Semiconductor Mission is poised to transform the country into a key player in the global electronics supply chain.
