The Indian government’s newly formulated semiconductor policy is hailed by the industry experts and leaders. However, there remains a concern. It is about the government taking stake in lieu of subsidies and gradation of incentives for fabs.
According to the new policy, semiconductor companies will invest just 30-35% of the cost to set up a semiconductor and display manufacturing unit. The central government will offer 50% of the project cost as subsidy, while the states have also been advised to offer sops over and above of the central government’s share, reports Times Now.
Along with other sops, several states have already announced 10-15% subsidy on capital expenditure.
The government will provide subsidies from the beginning of the construction stage, which will off-load huge pressure from the corporates as cost of building a semiconductor fab is huge and it takes years to complete. However, the industry is worried about some issues akin to gradation mentioned in the new government policy.
As mentioned in the policy, the government would provide fiscal support up to 50% for 28-nanometer (nm) fabs or below, up to 40% for 45-nm fabs and 30% for 65-nm fabs. This hints leaders to predict that the government is encouraging the manufacture of 28-nm fabs while discourage 65-nm fabs and above.
The government has already notified the Rs.76,000 crore semiconductor policy. Interested companies will be given 45 days to submit proposals to it, beginning January 1, 2022.
