Government Outlines Semiconductor Initiatives in Andhra Pradesh

India’s ambitious effort to strengthen its semiconductor and display manufacturing ecosystem has gained significant traction, with a special emphasis on states like Andhra Pradesh.

The Union Minister of State for Electronics and IT, Jitin Prasada, provided a comprehensive update in the Lok Sabha on initiatives under the Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem and broader measures for developing the semiconductor industry.

Focus on Andhra Pradesh

In the parliament, TDP MP B K Parthasarathi sought information about semiconductor manufacturing proposals, their current status (approved or pending), and the financial details associated with these projects in Andhra Pradesh over the last three years.

While responding to these questions MoS Prasada ensured that the state is integral to national capacity-building efforts under the Rs 76,000 crore Semicon India Programme. While Andhra Pradesh, leveraging its technical and educational resources, has emerged as a focal point in India’s semiconductor development roadmap, the Minister highlighted that institutions in the state are playing a crucial role in skilling and research under the central government’s Chips to Startup (C2S) programme.

The C2S programme supports 10 major institutions in the state. These are:

Indian Institute of Information Technology Design and Manufacturing Kurnool
Indian Institute of Technology Tirupati
JNTU, Anantapur
JNTU, Kakinada
National Institute of Technology Andhra Pradesh
Shri Vishnu Engineering College for Women, Bhimavaram
SRM University, AP
V.R. Siddhartha Engineering College, Vijayawada
Vignan’s Foundation for Science Technology and Research, Guntur
VIT-AP University, Amaravati, AP

These institutions focus on training a workforce specialized in VLSI (Very Large Scale Integration) and Embedded System Design, aiming to create a robust talent pool for chip design. The national initiative plans to train 85,000 engineers in total across 113 institutions.

Advancing Semiconductor & Display Ecosystems

India’s Semicon India Programme lays out a comprehensive framework to attract investments and bolster the domestic semiconductor and display ecosystem. Key highlights include:

Semiconductor and Display Fabs: Financial support covering 50% of project costs is available for setting up Silicon CMOS-based semiconductor fabs and display fabs in India.
Compound Semiconductor Facilities and OSAT Units: Fiscal support of 50% of capital expenditure is provided for establishing fabs for compound semiconductors, silicon photonics, sensors, and OSAT (Outsourced Semiconductor Assembly and Test) facilities.
Design-Linked Incentive (DLI) Scheme: Incentives of up to 50% of eligible expenditure for product design, with deployment-linked incentives ranging from 4% to 6% of net sales turnover over five years.

In addition to manufacturing incentives, modernization of the Semi-Conductor Laboratory in Mohali is underway to improve efficiency and reduce cycle time.

National Progress in Semiconductor Manufacturing

India has approved five semiconductor manufacturing projects with a combined investment of Rs 1.52 lakh crore. These projects are in various stages of implementation.

To foster design innovation, 15 semiconductor design companies have been approved under the DLI Scheme. Moreover, 41 companies have gained access to cutting-edge EDA (Electronic Design Automation) tools through the National EDA Tool Grid at C-DAC Bengaluru’s ChipIN Centre.

The efforts have positioned India as a leader in semiconductor design, employing nearly 20% of the global chip design engineers.

Collaborations to Drive Innovation

India is deepening its semiconductor capabilities through strategic international partnerships:

US: Memoranda of Understanding (MoUs) have been signed to strengthen ties in semiconductor manufacturing and research.
Applied Materials: A collaborative engineering centre has been set up in Bengaluru with an investment of $400 million, focusing on technology for semiconductor manufacturing equipment.
LAM Research: Partnered with the India Semiconductor Mission (ISM) for skilling engineers in semiconductor manufacturing.
AMD: Established its largest global design centre in Bengaluru, working on advanced technologies such as 3D stacking and artificial intelligence.

Ecosystem Development and Self-Reliance

The government is steering India toward self-reliance in semiconductor production. The focus extends to:

R&D Investment:

Up to 2.5% of the Semicon India Programme outlay is earmarked for research, skill development, and training.

PLI Schemes:

Large-Scale Electronics Manufacturing: Rs 9,349 crore in investments have generated production worth over Rs 6 lakh crore.

IT Hardware Manufacturing: Rs 501 crore in investments have produced Rs 10,245 crore worth of hardware.

Vision for the Future

India is making steady progress in creating a self-sufficient semiconductor manufacturing ecosystem. While design innovation remains a stronghold, efforts to establish a robust manufacturing base are gaining momentum.

Andhra Pradesh, along with other states, is set to become a significant player in this national mission, fostering the growth of high-tech industries and contributing to India’s aspirations to emerge as a global semiconductor hub.

This comprehensive overview underscores the critical role of state-level participation, financial incentives, and international collaborations in transforming India’s semiconductor landscape. With strategic investments and government support, the Central government is confident that the country is poised to achieve long-term growth and global competitiveness in this key sector.