The Government of India has invited an expression of interest from technology providers and investors for setting up a semiconductor fabrication plant in the country to meet the fast-growing demand in the electronics sector.
In the microelectronics industry, a semiconductor fabrication plant (commonly called a fab) is a factory where devices such as integrated circuits are manufactured.
The Empowered Committee set up by the Government of India invites a preliminary Expression of Interest (EoI) from potential technology providers and investors for the setting up of semiconductor fab plant in India, an advertisement by the Department of Information Technology said.
“The Government of India is in the process of developing a policy framework to provide preference for domestically produced electronics goods in government/government influenced procurement,” the advertisement added.
The advertisement has sought replies from both domestic and foreign technology providers and investors.
In order to promote semiconductor manufacturing, the Government has already allowed 100 per cent foreign direct investment (FDI) under the automatic route in fabs.
Apart from attractive financial incentives for capital investment in the projects, the Government of India will also provide assistance for setting up world-class infrastructure for the semiconductor fabs and its eco-system units, the announcement said.
Demand for electronics hardware in India currently stands at about $45 billion and is expected to cross $400 billion by 2020. Out of this, demand for semiconductors is expected to amount to nearly $50 billion, it said.
“The responses to this call for EoI may be sent within one month from the date of this advertisement,” it added.
Earlier, the Government of India had formed an Empowered Committee chaired by the Prime Minister, Dr Manmohan Singh, for identifying technology and investors interested in setting up semiconductor fabs in the country.
The committee has been mandated to assess and recommend the quantum of government support in physical/financial terms for translating the interest into semiconductor fabs. The committee has also been mandated to exercise oversight on implementation of the course of action approved by the government.
India, with a population of over 1.2 billion, is one of the fastest growing electronics markets globally.
The semiconductor design industry in India, consisting of VLSI design, board/hardware design and embedded software development, was estimated at $6.5 billion in 2009 and is expected to reach $10.6 billion in 2012.
Nearly 2,000 chips are designed in the country each year and more than 20,000 engineers are engaged in various aspects of chip design and verification.
This is in line with the Government of India’s plans to make multi-billion dollar investments in programmes which are major consumers of electronic goods like the countrywide roll-out of 3G, Wimax and 4G, provision of broadband to over 6,00,000 villages and a National Knowledge Network connecting over 20,000 colleges and research institutions.
Currently, India has a “Fab City”, an industrial park on the outskirts of Hyderabad, which was launched in 2007, with the Government offering tax breaks and capital subsidies to chip makers to set up operations.