The Centre has notified its new policy to promote the manufacturing and refining of semiconductor chips within the country. The government hopes to see local production starting as soon as the next 2-3 years, reported Bloomberg.

The government will be providing up to 50 percent of the cost for setting up two semiconductors and two display fabs units. Additionally, support through the EMC2.0 scheme, demand aggregation, support for R&D, and skill development and training programmes will be provided.

Also read: Incentive scheme will attract chipmakers to India for next 20 years: Ashwini Vaishnaw

The government had also announced a $10-billion package to incentivise companies to set up production in India last week, which will be spread over six years to boost chip production as well.

"The scheme aims to attract investments for setting up Compound Semiconductors/Silicon Photonics (SiPh)/Sensors (including MEMS) Fabs and Semiconductor ATMP/OSAT facilities in the country to strengthen the electronics manufacturing ecosystem and help establish a trusted electronics value chain in the areas of application of these fabrication and packaging technologies," the government said in its gazette notification.

Also read: Apple starts production of iPhone 13 in India: Report

While India has emerged as a centre of semiconductor research and design, the country has been lagging in the local production of the vital component. Semiconductor chips are required for items like smartphones, laptops, PC components, automobiles, electronic appliances, solar panels and more. The recent global semiconductor shortage, that has worsened due to collapsing global supply chains, has highlighted the need for countries to indigenously develop manufacturing capabilities for semiconductor chips.

But the recent efforts of the government may soon be bearing fruit in terms of boosting local production.

Also read: Tata's chip-making plan may hit silicon wafers import walls: Report

“In next 2-3 years’ time frame, we see at least 10-12 semiconductors going into production, we see display fab going into production or maybe finalising completion. At least 50-60 designing companies would have started designing the products in the next 2-3 years,” Ashwini Vaishnaw, who holds the portfolio of the Ministry of Electronics & Information Technology, told Bloomberg.

“The response has been very good. All the big players are in talks with Indian partners and many want to come directly to set up their units here. Almost all big ones are talking to us,” Vaishnaw added.

(Edited by : Shoma Bhattacharjee)