Cabinet approves Rs 63,412 crore for India’s semicon fab

The Cabinet has approved setting up of two semiconductor wafer fabrication (FAB) manufacturing facilities in India worth Rs 63,412 crore.

The semiconductor wafer fabrication facility will be spearheaded by Jaiprakash Associates (with IBM and Tower Semiconductor as partners) and HSMC Technologies India (with ST Microelectronics and Silterra Malaysia as partners).

Jaiprakash Associates Consortium
Project Cost: Rs 34,399 crore
Technology: 90/65/45/28 nm
Capacity: 40,000 WSPM
Location: Yamuna Expressway, Uttar Pradesh

HSMC Technologies Consortium
Project Cost: Rs 29,013 crore
Technology: 90/65/45/28/22 nm
Capacity: 40,000 WSPM
Location: Prantij, Gujarat

The government is planning to issue letter of intent (LoI) will be issued to the two consortia by March 31, 2014. The final agreements are expected to be signed by August 2014. The Empowered Committee has been authorized to take all decisions to implement the FAB projects in furtherance of the decision.

The proposed FABs will create direct employment of about 22,000 and indirect employment of about one lakh.

These FABs will have a big impact on the development of Electronics System Design and Manufacturing eco-system across the country. This will help set up a critical pillar required to promote Electronics System Design and Manufacturing in India. The semiconductor wafer fabrication units when set up, will stimulate the flow of capital and technology, create employment opportunities, help higher value addition in the electronic products manufactured in India, reduce dependence on imports, and lead to innovation.

The two consortium will benefit in terms of: 25 percent subsidy on capital expenditure and tax reimbursement as admissible under Modified Special Incentive Package Scheme (M-SIPS) Policy; Exemption of Basic Customs Duty (BCD) for non-covered capital items; 200 percent deduction on expenditure on R&D as admissible under Section 35(2AB) of the Income Tax (IT) Act; Investment linked deductions under Section 35AD of the IT Act; and Interest free loan of approximately Rs 5,124 crore each (exact amount to be calculated on Detailed Project Report appraisal).

Leave a Reply

%d bloggers like this: