The Centre plans to come out with a request for proposal (RFP) to set up semiconductor manufacturing facilities in the country at a time a raging chip crisis has derailed the production plans across sectors ranging from cars to consumer durables.

Sources said the government was in talks with Taiwan Semiconductor Manufacturing Company, which has a 50 per cent share in the global market, and other companies in that country to set up units.

India and Taiwan are keen to conclude a bilateral trade deal which would incentivise the Taiwanese companies to set up units A trade deal could see tariff cuts on components and other raw materials.

“There has been positive feedback from the firms on the trade talks and the measures that they expect the Indian government to take for setting up the units in the country,” sources said.

The Taiwan side has flagged concerns on the supply of water and electricity and has suggested India should focus on chip design first before proceeding to fabs.

The government is searching for locations where huge quantities of fresh water are available and also adequate manpower.

A mega IT park with space for 100 Taiwanese companies has also been planned as part of the trade negotiations.

The government had earlier come out with the expression of interest (EoI) for semiconductor fabs, with around 20 firms showing interest.

The ongoing global chip crisis is hurting industries across sectors as electronic items are needed in every segment these days.

Maruti backlog

Maruti Suzuki MD Kenichi Ayukawa has said the company has pending orders of 2.6 lakh bookings — largely because of the chip shortage. Chip shortages have delayed the much anticipated launch of a smartphone by billionaire Mukesh Ambani’s Reliance Industries that has been co-engineered with Google.

India’s semiconductor demand is is expected to reach $100 billion by 2025 and the demand at present is entirely met through imports.