The Ministry of Electronics and Information Technology (MeitY), in collaboration with the Ministry of Defence, has announced an initiative to offer a ‘deployment-linked incentive (DLI)’ to facilitate the indigenous designing and manufacturing of secure semiconductor devices. Under this initiative, the government is seeking the participation of Indian semiconductor design and manufacturing companies to indigenously design, develop, manufacture, validate and deploy Secure Systems on Chip (SoCs) using Indian-owned processors based on open-source ISA and deploy the SoCs for various applications.
Indigenous chips for Indian defence
The primary goal of this initiative is to promote two variants of indigenously designed and developed secure SoCs – BSC (Bharat secure chip)-1 and BSC-2. The current target that the two bodies have set in place is totalling 5 lakh SoCs. These SoCs would be deployed in several commercial and defence applications and systems.
The core of the SoCs will be based on the processors designed by Indian entities on open source ISA (industry standard architecture). This proposal also requires that the production of the SoCs should not only include the design aspect done in “India by an Indian entity”, but also the development and packaging of the same. Further, 10% of the 5 lakh SoCs should be deployed in systems and equipment for defence forces in the military role of their primary vendors.
The selected bidders would be required to identify a 64-bit Indian-owned processor based on open-source ISA and check its suitability for the intended purpose. The bidder would also be required to submit a report detailing the stability and suitability and that the SoCs meet the requirement of prospective deployment in the applications.
Under this proposal, the government has offered monetary DLI with handing 20% of it in advance. Notably, the defence forces are currently largely dependent on the in-house labs of the Defence Research and Development Organisation (DRDO) for designing semiconductor device requirements. The Semiconductor Laboratory (SCL), situated in Chandigarh under the Department of Space, is being used as the manufacturing base.
In March, a parliamentary panel noted that the shortage of semiconductor chips, along with talent retention and procurement through government e-marketplace, and delayed approval of key projects are some of the challenges faced by the Indian Defence Public Sector Undertaking (DPSUs) amid the push for self-reliance in the sector.
India’s semiconductor push
In December last year, the Indian government approved a Rs 76,000-crore scheme to establish display and semiconductor industries in India.
“The government of India is keen to incentivise and attract investment in setting up of semiconductor FABs in India. This assumes significance in view of the fact that India is poised to increase its share in the global manufacturing of mobile phones, IT hardware, automotive electronics, industrial electronics, medical electronics, IoT and other devices in the near future as it aspires to have USD 400 billion of electronics manufacturing by 2025,” a government statement said.
Under this scheme, the government provides financial support of up to 50% of the project cost to companies to set up semiconductor and display fabs along with 30% of capital expenditure to set up semiconductor packaging facilities and compound semiconductors. The scheme is expected to generate 35,000 direct and 100,000 indirect jobs.
Interestingly, the Joe Biden-led-US government passed the CHIPS and Science Act of 2022 in August. This bipartisan law focuses on federal aid to encourage the development of microprocessor manufacturing facilities in the United States. This Bill set aside $280 billion to boost domestic semiconductor production and technology research. The focus is to reduce the US’ dependence on overseas supply chains, particularly from China, and to further boost the country’s science and technology base, similar to the PLI scheme introduced by the Indian government. The China clause has created much hullabaloo, and few are anticipating a ‘Chip Cold War.’
