The Indian government launched the India Semiconductor Mission (ISM), a forward-thinking initiative aimed at revolutionizing semiconductor manufacturing and design in India. It is poised to revolutionize the manufacturing and design of semiconductors in India. As part of the ISM, the government has reopened the application window for semiconductor and display fabrication units. In this article, we will explore the key features of the ISM and shed light on the immense potential and benefits it holds.

Fuelling Growth: The India Semiconductor Mission

In December 2021, the ISM introduced a $10 billion stimulus program to drive growth in the Indian semiconductor industry. Subsequently, in May 2023, the government reopened the application window for establishing semiconductor and display fabrication facilities. The objective behind this action was to accommodate and encourage players with mature nodes of >40nm technology to apply for the incentives. The ultimate idea is to foster industry growth and attract key players.

Key Features of the ISM

Semiconductor Fabs and Display Fabs

Under the ISM, eligible applicants can receive substantial financial assistance that covers up to 70% of project costs. Consequently, this facilitates the creation of advanced semiconductor clusters with essential infrastructure elements. These elements include land, semiconductor-grade water, high-quality power, logistics, and research facilities. As a result, participants can thrive in a conducive environment for semiconductor manufacturing and design.

Semi-conductor Laboratory (SCL)

The Ministry of Electronics and Information Technology (MeiTY) takes charge of modernizing and commercializing the Semiconductor Laboratory (SCL). To achieve this, the existing brownfield fabrication facility undergoes modernization through a joint venture between the SCL and a commercial fabrication partner. The end goal is to enable cutting-edge semiconductor research and development.

Semiconductor Design Companies

The ISM offers semiconductor design companies lucrative incentives. For instance, design-related incentives can cover up to 50% of eligible expenditures. Furthermore, product deployment-related incentives range between 6% and 4% of net sales over a five-year period. Consequently, the mission aims to support the growth and development of 100 domestic semiconductor design companies. Additionally, it intends to enable the development of advanced Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems, and IP Cores.

Chips to Start-ups Program

The ISM’s Chips to Start-ups Program plays a pivotal role in fostering entrepreneurship and creating job opportunities. Through this program, 85,000 engineers will receive specialized training in semiconductor device design and manufacturing. As a result, it paves the way for them to launch their own start-ups. Ultimately, this program aims to create 35,000 high-quality direct jobs and generate 100,000 indirect employment opportunities.

Unleashing the Potential: Job Opportunities and Industry Growth

According to the Electronics Sector Skills Council of India (ESSCI), the Indian semiconductor industry was valued at approximately $82 billion in 2021-22, with a projected compound annual growth rate (CAGR) of 15%. Consequently, this growth trajectory is expected to propel the industry past $150 billion within the next five years. It’s important to note that the semiconductor design market, dominated by embedded systems design, accounts for 85-90% of the revenue share. The industry has already employed 139,000 individuals during fiscal year 2021-22. Presently, a majority (55%) of the workforce is engaged in design, research and development, and managerial roles. However, with the implementation of indigenous fabs under the ISM, there will be a substantial increase in manufacturing and fabrication roles. This is expected to create nearly 300,000 direct jobs by 2025-26.

Embracing Opportunities for Startups

The ISM provides numerous opportunities for semiconductor start-ups. They can leverage the fiscal support, infrastructure, and design-related incentives to thrive in the Indian electronics manufacturing and design industry. Moreover, access to Electronic Design Automation (EDA) tools and foundry services further enables semiconductor design start-ups to develop cutting-edge ICs, chipsets, and SoCs.

To summarize, the ISM is a transformative initiative that propels India towards becoming a global hub for semiconductor manufacturing and design. By supporting semiconductor fabrication units, modernizing research facilities, providing incentives for design companies, and fostering entrepreneurship, the ISM opens up significant opportunities. As a result, start-ups can play a pivotal role in shaping India’s semiconductor landscape, creating employment opportunities, and driving economic growth.