India's Semiconductor Resurgence: Modi govt's new chip making plan - 'Much bigger than' previous Rs 76k cr incentive
india’s semiconductor resurgence: modi govt’s new chip making plan – ‘much bigger than’ previous rs 76k cr incentive
To compensate for lost time in semiconductor manufacturing, the Indian government has initiated efforts towards a substantial new package, supplementing the already disbursed Rs 76,000-crore incentives.
This Rs 76,000-crore incentive package, which was launched in December 2021, aimed to bolster semiconductor manufacturing and investments in the sector. With this fund nearly depleted, there’s a pressing need for a fresh injection to propel India’s ambitious chip plans forward.
According to the TOI report by Pankaj Doval, the upcoming package is expected to significantly surpass the previous one. However, the announcement will likely await the formation of a new government, as cited in an ET report.
This package is poised to be a focal point for the new government, with plans to prioritize its implementation, as highlighted in the report citing sources. Also, many new proposals for semiconductor ventures have come in. According to the report, some proposals are in advanced stages, necessitating decisions from the Centre regarding incentives.
The success of the December 2021 package has spurred the government to develop a new one, especially in light of aggressive initiatives by countries like the US and China, which have unveiled significantly larger packages for semiconductor investments.
Currently, the government offers fiscal support of up to 50% of a project’s cost to eligible display and semiconductor fabricators. However, this support is nearly depleted due to recent surges in investments.
Despite previous struggles, India achieved a significant milestone when American Micron established a Rs 22,500-crore testing and packaging unit in Gujarat last June. Subsequently, approvals were granted for three proposals totaling almost Rs 1.3 lakh crore in February this year. These include a Rs 91,000-crore project by Tata Electronics in collaboration with Taiwanese Powerchip Semiconductor Manufacturing Corp in Dholera, Gujarat; a Rs 27,000-crore Semiconductor Assembly and Test (TSAT) unit by Tata in Morigaon, Assam; and a Rs 7,600-crore project by CG Power with Japanese Renesas Electronics and Stars Microelectronics of Thailand.
Furthermore, the Indian government has received new proposals in advanced stages of discussion, including a proposal for a display fab unit, which would be the country’s first, by Japanese Sharp, potentially attracting investments of up to Rs 40,000 crore. Additionally, there is a plan worth Rs 90,000 crore from Israel’s c chipmaker Tower Semiconductors for investments in India, as cited in an ET report.
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