Semicon 2.0: High-Level Govt Panel To Handpick Strategic Chips For Incentives, Says Ashwini Vaishnaw

The central government will set up a high-level panel to identify strategic semiconductor chips that will be eligible for incentives under the Semicon 2.0 scheme, Union Minister for Electronics and Information Technology Ashwini Vaishnaw said on Monday.

Speaking to reporters, Vaishnaw said the expert committee will be chaired by the Principal Scientific Adviser (PSA) and the National Security Adviser (NSA) and will identify chips based on national importance and strategic priorities.

The government has notified the Semicon 2.0 scheme with an outlay of Rs 1.27 lakh crore to strengthen India's semiconductor manufacturing ecosystem. The scheme has been divided into six segments covering designing of chips by Indian firms, setting up units for capital equipment required for chip production, semiconductor fabs, chip assembly, packaging and testing, etc.

Asked about the products for which India could meet domestic demand, Vaishnaw said Semicon 2.0 aims to enable several products, including sensors, to meet up to 100% of domestic requirements.

India is focusing on developing key semiconductor building blocks across compute, memory, radio frequency (RF), power, networking and sensors. Indian companies will develop chips in collaboration with multinational corporations, academia and startups, he said.

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Vaishnaw said the government is also looking to leverage mature platforms such as ARM, IBM Power, RISC-V and open-source technologies to accelerate chip design and development.

“Every major semiconductor equipment maker will set up operations in India very soon. We have received a good response from gas and equipment makers so far for the scheme,” Vaishnaw said.

The government has also opened chip-design incentives to startups and companies owned by Overseas Citizens of India (OCIs). Financial support for startups will be provided through grants and equity co-investment, he added.

Vaishnaw said the government's exit options under the scheme would include exiting at an equity valuation or through royalty financing at 1.5 times the investment.

Semicon 2.0 is a six-year programme, although the government expects to complete it ahead of schedule.

The scheme will focus on the domestic development of semiconductor intellectual property (IP) cores, chips, system-on-chips (SoCs) and modules for electronic products, based on national importance and strategic priorities identified from time to time.

As part of the programme, India will develop key semiconductor building blocks, including standard IPs for compute, memory, RF, power, networking and sensors.

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