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1st August 2023 (6 Topics)

Chip tactics

Context:

The government has made a fresh bid to attract major global chip manufacturers into the country at the Semicon India summit.

Incentives offered by the government:

  • Production-linked incentive scheme- A 10 billion dollars production-linked incentive scheme was unveiled for chip makers in late 2021.
  • Financial assistance- A low corporate tax rate, sops for all new manufacturing projects and 50% financial incentives under India’s semiconductor programme has been offered.
  • Government’s involvement- The government would bear half of the typically large investment outlays that companies commit to undertake.

From the point of view of Investors:

  • Friendshoring’ arrangement-Investors want to de-risk themselves from the dominance of China in the chips manufacturing supply-chain through ‘friendshoring’ arrangements and this arrangement from India is like a perfect match.
  • Stable operating environment-Apart from incentives, investors also need to see evidence of a stable operating environment with a predictable policy framework.
  • India’s trade linkages with world markets -They would also compare India’s trade linkages with world markets through bilateral or multilateral compacts.

Semicon India Summit 2023:

  • ATMP Plant- The conference witnessed the announcement of India’s first assembly, testing, marking and packaging (ATMP) facility plant in Sanand, Gujarat.
  • Tagline-The event came up with the tagline: Charkha to Chips.
  • Inspiring the Youth- The three-day Semicon India conference, was accompanied by a five-day exhibition aimed at exposing students and young professionals to the exciting world of chips
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