PLI SCHEME

Transformation Into A Semiconductor Powerhouse

    In a landmark move, on December 15, the government of India cleared a Rs 76,000 crore (approximately $10 billion) PLI (Production-Linked Incentive) scheme for the development of sustainable semiconductor and display ecosystem in India. This aims to provide attractive incentive support to companies or consortia that are engaged in manufacture of semiconductor fabs, display fabs, silicon photonics and sensors, as also semiconductor packaging and semiconductor design. The India Semiconductor Mission (ISM) aims to make India a global electronics production hub, in line with the principle of Atmanirbhar Bharat (self-reliant India) as espoused by Prime Minister Narendra Modi.

    MSMEs and startups can also participate in the programme by submitting their proposals under Academia-Industry Collaborative Project, Grand Challenge/Hackathons/Request For Proposal (RFP) for development of system/System on Chip (SoC) — essentially an integrated circuit (IC)/Intellectual Property (IP) Cores. IP Core is a reusable unit of cell or integrated circuit layout design that could be licensed to multiple vendors. Centre for Development of Advanced Computing (C-DAC), a scientific society operating under MeitY, will serve as the nodal agency for implementation of the  PLI Scheme. A dedicated portal has been made available for inviting Online applications from January 1, 2022, to December 31, 2024. The applicants can find the guidelines of the PLI Scheme on the portal and register themselves for availing of support under the scheme. The PLI Scheme will also take a graded and pre-emptive approach to Identify the Products of national priorities and implement strategies for their complete or near-complete indigenisation and deployment thereby taking steps towards the import substitution and value addition in strategic and societal sectors.

    The scheme has three components - Chip Design infrastructure support, Product Design Linked Incentive and Deployment Linked Incentive. Under the Chip Design infrastructure support, C-DAC will set up the India Chip Centre to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores and support for MPW (Multi Project Wafer fabrication) and post-silicon validation) and facilitate its access to supported companies. Under the Product Design Linked Incentive component, reimbursement of up to 50 per cent of the eligible expenditure subject to a ceiling of Rs 15 crore per application will be provided as fiscal support to the approved applicants who are engaged in semiconductor design. Under the Deployment Linked Incentive component, an incentive of 6 per cent to 4 per cent of net sales turnover over five years subject to a ceiling of Rs 30 Crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems and IP Cores and semiconductor linked design are deployed in electronic products.

    This will be a step towards leapfrogging in the Electronics System Design & Manufacturing (ESDM) space by way of inculcating the culture of SoC/System Level Design at bachelors, masters and research level, and act as a catalyst for the growth of startups involved in the fabless design. The current geopolitical scenario prioritises the security of critical information infrastructure above all and that’s why trusted sources of semiconductors and displays hold strategic importance. At present India’s semiconductor demand is entirely met through imports. Thus, there was a need to incentivise the value chain to make India economically self-reliant and technology leaders.

    A total outlay of Rs 230,000 crore ($30 billion) has thereby been earmarked to position India as a global electronics manufacturing hub, with semiconductors as the basic foundational block. Development of a holistic semiconductor and display ecosystem will be key to the security of critical information infrastructure. It will also be a major employment generator for the economy. Reports suggest that the government is already in active discussions with the likes of TSMC, Intel, AMD, and others. The PLI scheme will go a long way to forge the charter for India as a global electronics manufacturing hub that in turn will be a cornerstone to achieving $1 trillion digital economy and a $5 trillion GDP by 2025.