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India raises incentives for setting up semiconductor fabs

India raises incentives for setting up semiconductor fabs

India raises incentives for setting up semiconductor fabs
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By Pihu Yadav  Oct 6, 2022 12:48:16 PM IST (Updated)

So far, the incentive was for 65 nanometres but now this restriction has been removed and all sizes will be covered.

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

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According to a statement from the government on Tuesday, the 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".
The fiscal support for compound semiconductors, packaging and other semiconductor facilities has also been raised to 50 percent from 30 percent.
To become a hub for electronics manufacturing and reduce dependency on Chinese suppliers, the government of India had previously established an extensive incentive programme to develop chip and display companies in the country.
Those incentives are slated to be provided to businesses over six years and are anticipated to draw investments totalling 1.77 trillion yen.
According to the proposal, two chipmakers and two display manufacturers will open facilities in the next four years, investing between Rs 30,000 and 50,000 crore each. Additionally, the government had stated that 20 enterprises, including chip packaging companies and compound semiconductors companies that produce chips for the automotive industry, power equipment, etc., 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 Minister of Electronics and Information Technology.
The statement also said that in case of fiscal support being provided as equity, either in part or in full, the government's share would not exceed 49 percent of total project equity.
The incentives were first announced in December 2021 as part of the Production-Linked Incentive (PLI) scheme for the manufacturing of semiconductor and display manufacturing ecosystems.
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