Incentives of $1 Billion Per Chip Company Could Attract Large Investments To Set Up Fab Units in India, Says IESA Chairman

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Rajeev Khushu added that the incentives could attract investments worth a cumulative Rs 70,000 to 80,000 crore

Rajeev Khushu, Chairman, IESA

As the discussion for enabling semiconductor manufacturing in India are gaining momentum, a senior official at US-based chipmaker Texas Instruments has said that providing an incentive support up to $1 billion per chip manufacturing company in India can attract 2-3 large investments for setting up speciality fab units and help position the country as a key competitor in the global chipmaking industry. 

Rajeev Khushu, Director of Corporate Affairs & Government Relations at Texas Instruments (TI), in a conversation with The Economic Times, said, “Today most large markets are bullish on developing a chip manufacturing ecosystem within their geographies and even companies are looking to diversify their supply chains,” adding that the incentives could attract investments worth a cumulative Rs 70,000 to 80,000 crore.

Khushu, who is also the Chairman of the India Electronics and Semiconductor Association (IESA), highlighted that countries like the US, South Korea and China are providing large incentives of $50 billion, $100 billion and $450 billion respectively to encourage chip fabs to be set up in the country. 

While the need for semiconductor manufacturing has been prevalent everywhere, in light of the global chip crisis that has beat out major industries in almost every country, it has now become more important than ever for countries to explore local chip manufacturing. 

“But the upside for India is our large consumer base, demography and the ever growing appetite for electronics and automobiles apart from a large base of semiconductor design engineers. I believe $1 billion support per player from the Indian government can achieve a breakthrough by attracting 2-3 speciality fab factories in India,” he added.

In March, the Centre had invited recommendations from companies who may be interested in setting up semiconductors and display fab units in India, adding that it is looking to devise an incentive scheme within the next six months to draw 3-4 large investments in the sector.

Khushu said that leading global and domestic companies including some IESA members have submitted their expression of interest.

As part of its initiatives to bolster India’s semiconductor industry, IESA has launched two Electropreneur Parks (EP) in Delhi and Bhubaneswar aimed at supporting and mentoring startups. The Delhi EP has on-boarded 44 startups, incubated 26 startups and 10 are in the pre-incubation stage.

It has also launched the Semiconductor Fabless Accelerator Lab (SFAL) funded by the government of Karnataka which offers financial support for prototype Silicon product development.

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