半导体与电子：势头渐起

Nitij Mangal * | Equity Analyst91 22 4224 6124 | nmangal@jefferies.comMahesh Nandurkar * | Equity Analyst91 224224 6120 | mnandurkar@jefferies.comSagar Sahu, CFA * | Equity Analyst+91 22 4224 6119 | ssahu@jefferies.comKevin Verghese * | Equity Associate+91 22 4224 6303 | kverghese@jefferies.comSTRATEGY NOTERecent reports: Semiconductors: India'sNext Big LeapElectronics: A New Growth Opportunityfor Auto-component MakersExhibit 1 - Big targets115~220.70.91.11.3Source: Government of India, JefferiesExhibit 2 - ~75% of the BOM of a smartphoneis outside of processor and memory,12PCB,7,6,17Source: Government of India, Jefferies ..500010203040506070801.51.71.92.12.3.,25,18,15- HCL-Foxconn gets incentives for OSAT plant:HCL Group has partnered with Foxconn to set upan OSAT (Outsourced Semiconductor Assembly and Test) facility for driver chips. The plant willhave capacity for 20K wafers/month or 36mn chips/month; it is expected to start commercialproduction in 2027 and could meet ~40% of domestic demand for display driver chips forconsumer electronics, autos and other applications. The project will require total investment of$0.4bn (Rs37bn) with the Central and State Government together contributing ~70% in form ofsubsidies, and is expected to generate over 3,500 jobs. The manufacturing plant will be basedin Uttar Pradesh, making it the third Indian state after Gujarat and Assam to attract a majorsemiconductor project. HCL-Foxconn plant is the sixth project under the $10bn semis incentiveprogram launched in 2021. The scheme has triggered $19bn of investments, including ~70%fiscal support, for a chip fab and five ATMP/OSAT projects.Tata Electronics signs MoU for display chips:Tata Electronics has been at the forefront of theIndian semiconductor sector; it is setting up a $11bn fab in Gujarat for 28-110nm chips withPSMC of Taiwan, and a $3.3bn OSAT facility in the state of Assam. At the Gujarat SemiconductorSummit in March, Tata Electronics, Himax Technologies of Taiwan, and PSMC signed a MoUto deliver end-to-end display semiconductor solutions from chip design to manufacturing andpackaging, as well as electronics manufacturing services (EMS) for both Indian and globalmarkets. Himax (HIMX US) is a fabless semiconductor design company, focused on display andimaging ICs, with ~40% global market share in automotive display drivers chips. Its WiseEyetechnology provides ultra-low power computer vision and AI sensing to endpoint devices. Thethree companies also plan to collaborate to design and manufacture next-generation displaysolutions to meet global demand while enhancing supply chain resilience. Tata has also signedan MoU with Fujifilm of Japan to establish semiconductor materials ecosystem in India.CG Power off-take agreement with Renesas:CG Power is setting up a $0.9bn OSAT plant inpartnership with Renesas of Japan and Stars Microelectronics of Thailand. CG Power has enteredinto an off-take agreement with Renesas for about 40-50% of its production.Renesas, during its 2024 investor day, highlighted India as a key focus market to accelerategrowth as it expects share of India in global semiconductor market to rise from ~5% in 2022 to~10% by 2027. Renesas also expects India's locally-sourced semiconductor market to grow at32% CAGR over 2023-2030 with opportunities across industrial and automotive. The company isalso expanding its design capabilities in India and will work on designing 3nm chips in the country;it also plans increase its headcount to 1,000 by the end of 2025.$2.7bn incentives for electronic componentsThe Indian government has introduced a new $2.7bn incentive scheme to promote investmentsin electronics component manufacturing in the country. The scheme provides turnover linkedincentives starting at 4-10% in year-1 tapering to 1-5% by year-6 for display & camera sub-assemblies, passives, electro-mechanical parts, PCBs, Li-ion cells and device enclosures. Specificcomponents and capital equipment investments can also get 25% capex subsidy. Govt expectsto attract ~$7bn in investments and generate 92K jobs with this scheme. State governmentsare following suit, with Tamil Nadu and Assam offering additional incentives for componentmanufacturing.Please see important disclosure information on pages 7 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. HCL Group and Foxconn setting up $0.4bnOSAT facility for display driver chips.Tata Electronics, Himax and PSMC enterinto MoU for display chips and ultra-low-power AI sensing products.CGPower off-take commitments withRenesas for 40-50% of its production.India, a key growth market for Renesas.Indian government has introduced a new$2.7bnincentive scheme to promoteinvestmentsin electronics componentmanufacturing in the country.3 Exhibit 4 - A new $2.7bn scheme to promote electronics component manufacturing.100510152025PLI for electronics &relatedsectorsSource: Government of India, JefferiesExhibit 5 - Electr