By The Indian government has taken a major step towards boosting the country’s chip-making industry by inviting fresh applications for the establishment of chip-making plants. In a bid to attract investors, the Centre is offering a generous financial incentive of 50% under the Modified Semicon India programme. This initiative aims to encourage the production of “mature nodes” exceeding 40 nanometers.
According to the Ministry of Electronics and IT, applications for semiconductor fabrication and display fabrication units can be submitted starting from June 1, 2023. The fiscal incentives of 50% of the project cost will be made available to companies, consortia, and joint ventures interested in setting up display fabs using specified technologies within India.
Interested parties have until December 2024 to apply for the scheme. In addition to this, the ministry has also opened applications for the design-linked incentive scheme, which will also remain open until December. So far, a total of 26 applications have been received, and five have been approved under the DLI scheme.
Union Minister for Electronics and Technology, Rajeev Chandrasekhar, highlighted the government’s strategy to encourage the adoption of mature nodes greater than 40 nm. While mature nodes are generally more affordable, there is a global trend towards migrating to the newer 28 nm class, despite its higher costs, due to its superior performance. The minister expressed optimism that existing applicants would reapply, and new investors would also participate in the scheme.
Chandrasekhar assured that there have been no rejections of any existing proposals, providing hope for Vedanta, which has been pursuing the 28 nm technology. He further emphasized that the modified scheme allows all previous applicants to incorporate suitable modifications in their proposals and reapply.
The Semicon India Programme, launched by the government in December 2021 with an investment of Rs 76,000 crore, aims to strengthen the country’s semiconductor manufacturing capabilities. With the introduction of the modified scheme and the attractive financial incentives, India is poised to become a hub for chip-making, attracting both domestic and international players to invest in the industry.