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Government planning to set Rs 25,000 crore chip-manufacturing units fearing rogue programs in imported chips
KOLKATA: Fearing the possibility of rogue programs getting embedded in imported chips that could compromise security of critical installations, the government is planning to two chip-manufacturing units at an investment topping Rs 25,000 crore.
Right now, there are no chip manufacturing facilities in India and the department of information technology has recently received the Union Cabinet's nod for the project. The facilities will be set up either exclusively by the Defence Research and Development Organisation ( DRDO )) and a defence public sector unit or through a public-private partnership.
"Plans include setting up a semiconductor unit (Fab-1) with established technology to support fabrication of chips to meet the requirement of high volume products as well as the requirement of the fab-less design companies on pay-per-use basis. This activity may involve either setting up a plant in India with established technology or acquiring an existing fabrication abroad and its eventual relocation to India. The government support needed for either of the options will be negotiated," a department of information technology statement said on Wednesday.
Fab-2 - the second phase of the project -- will entail a greenfield state-of-the-art semiconductor fabrication unit. This would imply giving equity or grant to an established integrated device manufacturer to set up the unit in India. The amount of equity or grant will also be negotiated with the government, the note said.
To begin with, the department will set up an empowered committee that will identify technology and investors for the facilities.
This committee will recommend the sequence and priority between the proposed Fab-1 and Fab-2 facilities. The members will also assess and recommend the nature and quantum of government support such as equity, grant or subsidy in physical or financial terms that may be required to translate the interest into investment.
This committee will submit its recommendations to the government by July 31. The decision to set up a fabrication facility was originally mooted by another committee comprising the chairman of the National Manufacturing Competitiveness Council (NMCC) and the adviser to Prime Minister on Public Information Infrastructure and Innovation; secretary, information technology and secretary, telecommunications.
The committee also recommended introduction of policies for preferential access to "manufactured-in-india" or "Indian products" electronics goods for all government procurements and procurement by government licensees, creation of a dedicated "electronic development fund"; a National Electronics Mission , manufacture of high-priority electronic product line in India through capital grant and creation of electronic manufacturing clusters.
India is already a hub for semiconductor design with nearly 2,000 chips being designed every year and more than 20, 000 engineers engaged in chip design and verification -- mostly at the research centres of global semiconductor firms.
Annually, India generates nearly $2 billion in revenues for the chip design services. The semiconductor manufacturing companies abroad are generating revenues to the tune of $ 15 billion from wafer manufacturing based on these designs.
Chip packaging and testing companies are generating $5 billion revenue based on these wafers produced for the India designed chips. The government feels that a local chip manufacturing facility will have a catalytic impact on the development of downstream and upstream products, including ancillaries and will create 2.83 crore employment by 2020.
Global market cyclical trends notwithstanding, India's semiconductor market grew by 28.3% in 2010. Much of this growth was driven by mobile devices, information technology and office automation including tables and smartphones.
A report released by India Semiconductor Association and Frost and Sullivan, says India's addressable semiconductor market is estimated at $6.55 billion in 2010 and $9.86 billion in 2011. Says Pradip K Dutta, chairman of ISA, there are strategic reasons for a country like India develop domestic electronics manufacturing ecosystem for local manufacturing to reduce the import bill of electronic components.
Government planning to set Rs 25,000 crore chip-manufacturing units fearing rogue programs in imported chips - The Economic Times
KOLKATA: Fearing the possibility of rogue programs getting embedded in imported chips that could compromise security of critical installations, the government is planning to two chip-manufacturing units at an investment topping Rs 25,000 crore.
Right now, there are no chip manufacturing facilities in India and the department of information technology has recently received the Union Cabinet's nod for the project. The facilities will be set up either exclusively by the Defence Research and Development Organisation ( DRDO )) and a defence public sector unit or through a public-private partnership.
"Plans include setting up a semiconductor unit (Fab-1) with established technology to support fabrication of chips to meet the requirement of high volume products as well as the requirement of the fab-less design companies on pay-per-use basis. This activity may involve either setting up a plant in India with established technology or acquiring an existing fabrication abroad and its eventual relocation to India. The government support needed for either of the options will be negotiated," a department of information technology statement said on Wednesday.
Fab-2 - the second phase of the project -- will entail a greenfield state-of-the-art semiconductor fabrication unit. This would imply giving equity or grant to an established integrated device manufacturer to set up the unit in India. The amount of equity or grant will also be negotiated with the government, the note said.
To begin with, the department will set up an empowered committee that will identify technology and investors for the facilities.
This committee will recommend the sequence and priority between the proposed Fab-1 and Fab-2 facilities. The members will also assess and recommend the nature and quantum of government support such as equity, grant or subsidy in physical or financial terms that may be required to translate the interest into investment.
This committee will submit its recommendations to the government by July 31. The decision to set up a fabrication facility was originally mooted by another committee comprising the chairman of the National Manufacturing Competitiveness Council (NMCC) and the adviser to Prime Minister on Public Information Infrastructure and Innovation; secretary, information technology and secretary, telecommunications.
The committee also recommended introduction of policies for preferential access to "manufactured-in-india" or "Indian products" electronics goods for all government procurements and procurement by government licensees, creation of a dedicated "electronic development fund"; a National Electronics Mission , manufacture of high-priority electronic product line in India through capital grant and creation of electronic manufacturing clusters.
India is already a hub for semiconductor design with nearly 2,000 chips being designed every year and more than 20, 000 engineers engaged in chip design and verification -- mostly at the research centres of global semiconductor firms.
Annually, India generates nearly $2 billion in revenues for the chip design services. The semiconductor manufacturing companies abroad are generating revenues to the tune of $ 15 billion from wafer manufacturing based on these designs.
Chip packaging and testing companies are generating $5 billion revenue based on these wafers produced for the India designed chips. The government feels that a local chip manufacturing facility will have a catalytic impact on the development of downstream and upstream products, including ancillaries and will create 2.83 crore employment by 2020.
Global market cyclical trends notwithstanding, India's semiconductor market grew by 28.3% in 2010. Much of this growth was driven by mobile devices, information technology and office automation including tables and smartphones.
A report released by India Semiconductor Association and Frost and Sullivan, says India's addressable semiconductor market is estimated at $6.55 billion in 2010 and $9.86 billion in 2011. Says Pradip K Dutta, chairman of ISA, there are strategic reasons for a country like India develop domestic electronics manufacturing ecosystem for local manufacturing to reduce the import bill of electronic components.
Government planning to set Rs 25,000 crore chip-manufacturing units fearing rogue programs in imported chips - The Economic Times
