Budget 2024: Empowering India's Semiconductor Sector

Budget 2024: Empowering India's Semiconductor Sector
Budget 2024: Empowering India's Semiconductor Sector


Budget 2024: Semiconductor Production - The Indian government's ambitious vision to transform the nation into a global semiconductor hub is gaining momentum with strategic budget allocations. The recent announcement of a Rs 6,903 crore allocation in the interim budget for 2024-25 underscores India's commitment to becoming a prominent player in semiconductor manufacturing. This significant increase, up from Rs 3,000 crore in the previous year's budget, reflects a pivotal moment for the semiconductor industry in India.


Driving Forces Behind the Allocation

The journey towards establishing India as a semiconductor powerhouse began with the unveiling of a Rs 76,000 crore incentive package for semiconductor and display fabs in December 2021. Subsequent budgetary allocations, including Rs 3,000 crore in the previous fiscal year, set the stage for a transformative period in India's semiconductor landscape.


Satya Gupta, president of the VLSI society, aptly captures the sentiment, emphasizing that the year 2024 will mark a breakthrough for the semiconductor sector in India. The allocation signals a promising trajectory, with investments poised to fuel innovation and propel India's emergence as a semiconductor product nation.


Key Areas of Focus in Semiconductor Industry 

A closer look at the budget allocation reveals strategic emphasis on key areas essential for semiconductor development:


  • Incentives for ATMP: A substantial portion of Rs 4,203 crore has been earmarked for incentives aimed at Assembly, Testing, Marking, and Packaging (ATMP). This allocation is expected to catalyze projects by industry giants such as Micron, Foxconn-HCL joint venture, and Tata Group, stimulating renewed interest in the ATMP sector.


  • Semiconductor Fab and Chip Plants: Rs 1,500 crore has been designated for semiconductor fabs and electronic chip plants, fostering growth in compound semiconductors and sensor manufacturing. Additionally, Rs 900 crore has been allocated to support the Mohali-based semiconductor laboratory, with Rs 200 crore dedicated to the design-linked incentive scheme, promoting design and Intellectual Property Rights (IPR) development in India.


Prospects and Projects in the Pipeline

The semiconductor landscape in India is abuzz with activity, with over 12 large-scale projects currently under discussion. Notable projects include those by Tata Electronics, Tower Semiconductor, Silicon Power, and others. However, the government's insistence on Production Grade Technology underscores its commitment to ensuring the quality and viability of proposed projects.


Semiconductor Industry Perspectives

Hitesh Garg, Vice President and India Managing Director of NXP Semiconductors, lauds the budgetary provisions as a significant boost to the semiconductor and electronics manufacturing sector. He highlights the allocation's focus on supporting capital expenditure and research, which he believes will accelerate industry growth and elevate India's stature in electronics system design and semiconductor manufacturing.


Looking Ahead

While stakeholders like NXP Semiconductors express optimism regarding the opportunities presented by Budget 2024, the industry awaits further developments. The budgetary allocations represent a pivotal step towards realizing India's potential as a global semiconductor player.


In conclusion, Budget 2024-25 signifies a decisive move towards fostering innovation, driving investment, and positioning India as a burgeoning hub for semiconductor excellence. As the government and industry collaborate to harness the full potential of this sector, the future promises exciting possibilities for India's technological advancement and economic growth.