Empowered Committee set up for identifying technology and investors for semiconductor wafer fabrication (Fab) manufacturing facilities in India

NEW DELHI, INDIA: The Union Cabinet has approved the proposal to set up an Empowered Committee for identifying technology and investors for setting up two semiconductor wafer fabrication (Fab) manufacturing facilities in the country.

The Empowered Committee comprising Adviser to PM on Public Information, Infrastructure and Innovation; Chairman, National Manufacturing Competitiveness Council (NMCC); Secretary, Department of Expenditure; Member (Industry), Planning Commission; Dr. M. J. Zarabi, Former CMD, Semiconductor Complex Ltd. (SCL) - Technical Expert and Secretary, DIT - Member Convenor has been set up. The Empowered Committee may co-opt any other experts.

The Empowered Committee will identify technology and potential investors for establishment of Semiconductor Wafer Fabs, and thereafter ascertain their interest in setting up of Semiconductor Fab facilities in the country; to assess and recommend the nature and Quantum of Government support such as equity/grant/ subsidy in physical/financial terms that may be required.

The Empowered Committee shall submit its recommendations to the Government by 31.7.2011.

Background
A Committee comprising the Chairman, National Manufacturing Competitiveness Council (NMCC) and Adviser to Prime Minister on Public Information Infrastructure and Innovation and including the Member Secretary, NMCC; Secretary, Information Technology and Secretary, Telecommunications has made five recommendations:

(i) Set up Semiconductor Wafer Fabs; (ii) Create policies for preferential access to "Manufactured-in-lndia” "Indian Products" electronics goods for all government procurements and procurement by Government Licensees; (iii) Set up a dedicated "Electronic Development Fund"; (iv) Set up of a National Electronics Mission (NEM) and (v) Encourage manufacture of specific high priority electronic product line in India by providing capital grant and creation of electronic manufacturing clusters.

The recommendations of the Committee referred to above have been examined in detail in a series of inter-ministerial meetings and appropriate proposals are being evolved for approval of the competent authority on each of these recommendations.

Electronics hardware sector is capital intensive and is facing several disabilities and barriers Therefore, the proposal will have significant impact in resolving these issues and help Indian electronics hardware industry to develop localized content/ value addition.

The Rough Order of Magnitude (ROM) of investment for the two wafer fabs (Fab-1 and Fab-2) is estimated at to be Rs. 25,000 Crore (approximately $ 5 billion). The exact level of government support could be finalized by way of negotiations.

The Indian electronics hardware industry and the Indian economy would be the direct beneficiaries of the proposal. The Semiconductor Wafer Fabs will have catalytic impact on development of downstream and upstream products, including ancillaries. It would have sizable impact on the development of IT/ITES sector particularly in Very Large Scale Integration (VLSI) design software, solutions and services.

It will also bootstrap innovation and R&D, especially in the area of semiconductors and others. It will help generating employment of the order of about Rs. 3 crore (direct and indirect) by 2020 across various levels of competencies.