$10 Billion Incentives On Offer As India Formally Invites Proposals From Firms For Semiconductor Chip Manufacturing, Display Fab Units

Within days of announcing a Rs 76,000-crore policy push for semiconductor and display manufacturing, the government on Thursday said it will start receiving applications from companies keen on setting up semiconductor fabs, display units and for other related schemes from January 1, 2022.

Releasing the guidelines for mega scheme designed to woo large semiconductor players, IT Minister Ashwini Vaishnaw on Thursday exhorted companies to leverage this ''good opportunity'' and ''right time'' to set up their manufacturing operations in the country.

Asked specifically about US chipmaker Intel, Vaishnaw declined to comment on specific players. He, however, asserted that the overall response to the scheme is ''good'' and the government is ''very hopeful''.

Companies proposing to set up semiconductor fabs can apply under the scheme from January 1, 2022, an official release said adding that the application period will be for a period of 45 days which is extendable based on the response received from the industry.

A semiconductor portal has been launched for filing and processing applications from interested players. ''All the schemes have been notified, uploaded on the website and a portal has been prepared for receiving the applications. So January 1, 2022 onwards, we will start receiving the applications,'' Vaishnaw said at a briefing.

The scheme aims to attract large investments for setting up semiconductor wafer fabrication facilities in the country.

''The structure and quantum of the fiscal support will be negotiated by the India Semiconductor Mission with the applicants who are selected on the basis of technological and financial evaluation of their proposals,'' the release said.

The fiscal support will be provided on 'pari-passu' basis for a period of six years from the date of approval both for semiconductor fabs and display fabs.

Besides this, semiconductor and display fabs set up in India will be supported through purchase preference in procurement of electronic products by the government under the public procurement order.

The scheme for setting up display fabs entails fiscal support of up to 50 per cent of the project cost (ceiling of Rs 12,000 crore per fab). The scheme aims to attract large investments for manufacturing `TFT LCD' or `AMOLED' based display panels.

Like in case of semiconductor fabs, for display fabs too the application period will be of 45 days, extendable based on the response.

The Design Linked Incentive (DLI) scheme offers sweetners across various stages of development and deployment of semiconductor design for Integrated Circuits, Chipsets, System on Chips, and semiconductor linked design amongst others.

Under the product design linked incentive component of the scheme, reimbursement of up to 50 per cent of the eligible expenditure subject to a ceiling of Rs 15 crore per application will be provided as support.

For `Deployment Linked Incentive' component of the scheme, incentives of 6 per cent to 4 per cent of the net sales turnover over five years subject to a ceiling of Rs 30 crore per application will be provided to approved applicants whose semiconductor design are deployed in electronic products.

Domestic companies can apply for support under this scheme and the duration of the scheme for receipt of the application is three years. Fiscal support will be available for a period of five years from application date.

The release further said that Saurabh Gaur has joined as CEO in charge of the `India Semiconductor Mission'.

Earlier this month, the government had approved a Rs 76,000-crore scheme to boost semiconductor and display manufacturing in the country, in an bid to position India as a global hub for hi-tech production, and attract large chip makers.

On larger message to global giants at a time when India is set to woo semiconductor players through the mega scheme, the minister said, '

'This is a real opportunity for all big and small players and the right time for companies to come and set up their manufacturing facilities in India. So, welcome to India.''

Stating that nearly 85,000 semiconductor engineers will be made ready, the minister said a preliminary list of 60 institutions has been prepared which will be sent to Ministry of Education. ''Once we get their views, we will finalise it...and work out the courses, and their duration,'' he said.

It is pertinent to mention here that under the Rs 76,000-crore scheme approved for development of semiconductors and display manufacturing ecosystem by India, incentives have been lined up for companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensors fabs, semiconductor packaging and semiconductor design.

With the semiconductor incentive scheme in place, the government expects investments of around Rs 1.7 lakh crore and 1.35 lakh jobs in the next four years.