Chip equipment maker Lam Research to invest under local manufacturing sops

Global semiconductor manufacturing equipment maker Lam Research has applied for incentives under the government's Scheme for Promotion of Manufacturing of Electronic components and Semiconductor (SPECS) for local production, according to an official note released by the Ministry of Electronics and Information Technology (MeitY).

Lam Research India Private Limited has proposed an investment of Rs 208 crore, while the government will provide incentives worth Rs 32.21 crore. The application received approval from the government on July 6, but the company has not commented on the details of the investment.

Notified in April 2020, the SPECS scheme offers a financial incentive of up to 25 per cent on capital expenditure for a specific list of electronic goods. These goods encompass the downstream value chain of electronic products such as electronic components, semiconductor or display fabrication units, ATMP units, specialised sub-assemblies, and capital goods for the manufacture of the aforementioned goods.

Based in Fremont, California, Lam Research supplies wafer fabrication equipment and solutions for active components used in semiconductor wiring and wafer cleaning, which are critical parts of a chip manufacturing facility. This investment is of particular significance in light of the government's push to create a local ecosystem for semiconductor manufacturing.

Currently, Lam Research operates in India from its design and software development campus in Bengaluru, where a local workforce is engaged in hardware engineering, global operations management, analytics for designing sub-assemblies and subsystems, and providing innovation. The company recently announced plans to train 60,000 engineers in nano-fabrication in India over the next decade in partnership with the Indian Institute of Science (IISc), Bengaluru.

With the new application from Lam, as of July 2023, the government has approved 36 applications with a proposed investment of Rs 11,429 crore and committed incentives of Rs 1,562 crore since the inception of the SPECS scheme in 2020. This is compared to 34 electronic components manufacturing proposals worth Rs 11,187 crore received until March 30.

So far, proposals from major electronics companies such as Tata Electronics, Samsung Display Noida Private Limited, Salcomp Technologies, Sahasra Semiconductors, IdemiaSyscom, Deki Electronics, Molex India, and Continental Device India Private Limited have been approved.

A meeting of the Clarification Committee took place on July 18 to check the eligibility of products under the scheme, resulting in seven approvals under the Semiconductor Design Linked Incentive (DLI) scheme.