October 3, 2022
Semiconductor manufacturing in India: Government to give 50 percent incentive for chip fabs


The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a proposal to provide 50 per cent financial incentive for manufacturing semiconductor fabs for technology nodes as well as for compound semiconductors, packaging and other chip facilities.

The cabinet approved amendments to the “Program for Development of Semiconductors and Display Manufacturing Ecosystem in India”.

Under the revised programme, uniform financial assistance of 50 per cent of the project cost will be provided across all technology nodes for setting up semiconductor fabs.

In view of the specific technology and nature of composite semiconductors and advanced packaging, the revised schedules for Composite Semiconductors/Silicon Photonics/Sensors/Discrete Semiconductors FAB and ATMP/OSAT, as per a official statement Issued after cabinet meeting.

The program has attracted many global semiconductor players to set up fabs in India. The revised program will accelerate investment in semiconductor and display manufacturing in India. Based on discussions with potential investors, it is expected that the work of setting up the first semiconductor facility will start soon.

An advisory committee consisting of global experts from industry and academia was constituted to advise the India Semiconductor Mission – the nodal agency for the program for the development of semiconductors and performance manufacturing ecosystem in India.

The Advisory Committee has unanimously recommended uniform support for all technology nodes of Silicon Semiconductor Fab / Silicon Photonics / Sensor / Discrete Semiconductor Fabs and ATMP / OSAT, which has been accepted by the Government.

There is a high demand for technology nodes of 45nm and above which is driven by, inter alia, automotive, power and telecommunications applications. In addition, this segment accounts for about 50 per cent of the total semiconductor market, the Ministry of Electronics and IT said in the statement.


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