Govt should encourage large Indian engineering firms to get into semiconductor design: ICEA

The government should encourage large Indian engineering corporations to invest in and create intellectual property in the semiconductor design space to help the country create a place on the global chip supply chain, industry body India Cellular & Electronics Association has said.

Additionally, the government must also increase funding for the semiconductor design ecosystem by designating semiconductor design and manufacturing as a sector of strategic importance. The increase in funding can be done through a low-cost bank or a separate capital market system for investments in technology companies, the ICEA suggested.

Similarly, the chips startups program, which offers a slew of incentives should be expanded to encourage more firms working in the space, the industry body suggested.


“Access to a Fab at reasonable prices and the earliest opportunity is vital for the success of Semiconductor fabless companies to tape out their designs. Most firms fail in this regard. The Government of India must acknowledge this challenge and seek methods to overcome it, learning from nations like China,” the ICEA said.

India took the first steps towards making the country a semiconductor-producing nation in December 2021 when it approved a $10 billion incentive package for companies willing to set up chip manufacturing as well as packing units in India.

So far, US’ Micron, the Tata Group and CG Power Group have been successful applicants under the government’s semiconductor incentive program. While the Micron Group is setting up a chip packaging facility at Sanand in Gujarat, the Tata Group is setting up a chip manufacturing facility at Dholera in Gujarat and one chip packaging unit at Morigaon in Assam.

The CG Power Group is also setting up a chip packaging unit at Sanand in Gujarat.