Cabinet approves 50 percent incentive for setting up semiconductor fabs | The Financial Express

Cabinet approves 50 percent incentive for setting up semiconductor fabs

The technology nodes of 45nm and above have high demand in India. This segment is primarily driven by the automotive, power and telecom applications.

Cabinet approves 50 percent incentive for setting up semiconductor fabs
The technology nodes of 45nm and above have high demand in India. This segment is primarily driven by the automotive, power and telecom applications. (Stock Shots)

The Cabinet, chaired by Prime Minister Narendra Modi, has approved modifications in the programme for development of semiconductors and display manufacturing ecosystem in the country.

Under the modified programme, a uniform fiscal support of 50 percent of project cost shall be provided across all technology nodes for setting up of semiconductor fabs.This modified programme will also offer fiscal support comprising of 50 percent of capital expenditure for setting up compound semiconductors, packaging and other semiconductor facilities

The programme has attracted many global semiconductor players for setting up fabs in India. According to the Ministry, the modified programme, will expedite investments in semiconductor and display manufacturing in India. On the basis of discussion with potential investors, it is expected that work on setting up of the first semiconductor facility will commence soon.

An Advisory Committee comprising global experts from industry and academia was constituted to advise India Semiconductor Mission ($10 billion outlay)- the nodal agency for the Programme for development of semiconductors and display manufacturing ecosystem in India.

This Committee has unanimously recommended uniform support for all technology nodes of silicon semiconductor fabs accepted by the Government.

The technology nodes of 45nm and above have high demand in India. This segment is primarily driven by the automotive, power and telecom applications. Moreover, this segment constitutes around 50 percent of the total semiconductor market.

In fact semiconductors enable most of the innovation in the automotive products starting from the digital connect, navigation controls, collision detection system and many others. According to many recent studies, the global automotive semiconductor market is forecast to breach the $70 billion mark by 2028, with a compound annual growth rate surpassing 11 percent from the $38 billion plus level in 2021.

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