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Intel planning semiconductor manufacturing unit in India as govt rolls out incentives

IBEF:  December 29, 2021

Global chipmaker Intel is aiming to open a semiconductor manufacturing facility in India. The move by the US-based chipset giant comes on the heels of the Union Cabinet's recent decision on semiconductors, which will support research and innovation in the industry as well as enhance production, bolstering the 'Aatmanirbhar Bharat' programme. Ashwini Vaishnaw, India's Minister of IT and Electronics, tweeted to welcome Intel to the country.

In order to position India as a worldwide hub for hi-tech production, the Union Cabinet authorised a Rs. 76,000 crore (US$ 10.2 billion) policy boost for the country's semiconductor and display manufacturing ecosystem. By providing a globally competitive incentive package to enterprises in semiconductors and display manufacturing, as well as design, the programme is projected to usher in a new era in electronics manufacturing. It will boost India's scientific capacity and economic self-sufficiency in these vital areas. By facilitating finance support and technological cooperation, the programme will boost semiconductor and display manufacturing.

Companies involved in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensors fabs, semiconductor packaging, and semiconductor design will benefit from the government's substantial incentive assistance. Eligible applicants would get financial assistance of up to 50% of the project cost under the scheme for the establishment of semiconductor and display fabs in India.

To approve applications for at least two greenfield semiconductor fabs and two display fabs in the country, the Centre will work closely with state governments on high-tech clusters with the necessary infrastructure in terms of land, semiconductor grade water, power, logistics, and research ecosystem.

The Ministry of Electronics and IT will take the necessary efforts to modernise and commercialise the semi-conductor laboratory (SCL). The IT Ministry will look at the potential of a SCL-commercial fab partner forming a joint venture to modernise the brownfield fab plant.

According to an official statement, "the Scheme for setting of compound semiconductors / silicon photonics / sensors fabs and Semiconductor ATMP / OSAT facilities in India shall extend fiscal support of 30% of capital expenditure to approved units."

Under this strategy, at least 15 such compound semiconductor and semiconductor packaging units are expected to be created with government assistance. For five years, a Design Linked Incentive (DLI) plan will provide a reward of up to 50% of eligible spending and a product deployment linked incentive of 4-6% of net sales.

"Support will be provided to 100 domestic companies of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs)... and semiconductor linked design, and facilitating the growth of not less than 20 such companies which can achieve turnover of more than Rs. 1,500 crores in the coming five years," the statement said.

A dedicated and independent 'India Semiconductor Mission (ISM)' would be developed to drive long-term plans for establishing a sustainable semiconductors and display ecosystem.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.