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Context:
The Central government has finalized the framework for Phase 2 of ISM and is holding internal discussions before the official rollout.
Key Highlights:
- The scheme will focus on:
- Strengthening semiconductor design and innovation.
- Supporting raw materials, equipment, gases, and specialty chemicals for semiconductor manufacturing.
- Enhancing the fabless semiconductor ecosystem by modifying the Design Linked Incentive (DLI) scheme to support more ambitious projects.
- Government’s Goal: To build a sustainable and competitive semiconductor ecosystem while moving up the value chain.
Key Challenges Identified
- Risk of overcapacity in legacy nodes due to global supply chain dynamics.
- Need for localized supply chains to reduce dependency on other geographies.
CDIL-Infineon Partnership
- CDIL Semiconductors (India) & Infineon Technologies (Germany) have signed an MoU to explore collaboration opportunities in India’s semiconductor market.
- Key Aspects of the Partnership:
- Infineon will supply bare die wafers to CDIL.
- CDIL will package and produce discrete & module semiconductor products for Indian customers.
- Focus areas include e-mobility, renewable energy, and energy-efficient appliances.
- Industry Impact:
- The partnership is expected to accelerate semiconductor manufacturing in India under the “Make in India” initiative.
- India is being positioned as a hub for semiconductor innovation and excellence.
Future Outlook
- Upcoming ISM Phase 2 Announcements will determine the scale and scope of government incentives and industry participation.
- Increased localization of semiconductor supply chains will be a priority to reduce import dependencies.
- More international partnerships like CDIL-Infineon may emerge as India strengthens its semiconductor ecosystem.