Govt Raises Incentives for Setting Semiconductor Fabs in India

The government has approved fiscal support of 50 percent for setting up semiconductor fabs in the country across technology nodes and display manufacturing.

In furtherance of positioning India as the global hub for ESDM (electronics system design & manufacturing) and the vision of Aatmanirbhar Bharat, the programme contains various schemes to attract investments in the field of semiconductors and display manufacturing. 

According to a government statement, the main objective of the order is "to attract large investments for setting up semiconductor wafer fabrication facilities in the country to strengthen the electronics manufacturing ecosystem and help establish a trusted value chain".

In addition, the fiscal support for compound semiconductors, packaging and other semiconductor facilities has also been raised from 30 percent to 50 percent. The government of India had previously established an extensive incentive programme to develop chip and display companies in the country, in order to reduce dependency on Chinese suppliers. Incentives from this programme are set to cater to businesses over six years and draw investments up to Rs 1 trillion.

The proposal states that two chipmakers and two display manufacturers will open facilities in the next four years, investing between Rs 30,000 and 50,000 crore each. Around 20 enterprises, including chip-packaging companies and compound semiconductors companies that produce chips for the automotive industry  are scheduled to be operational in three years with investments between Rs 3,000 and 5,000 crores.

The support will be provided for six years, and it could also be extended based on the approval of the Ministry of Electronics and Information Technology.