Approval to establish two Semiconductor Wafer Fabrication Manufacturing Facilities in India

Approval to establish two Semiconductor Wafer Fabrication Manufacturing Facilities in India

The Cabinet has approved setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities in India. These FAB units are to be set up by two business consortia, with the following broad project parameters:

(i) M/s Jaiprakash Associates Limited (with IBM, USA and Tower Semiconductor Limited, Israel as partners)

a) Project Cost: Rs 34,399 crore

b) Technology: 90/65/45/28 nm

c) Capacity: 40,000 WSPM

d) Location: Yamuna Expressway, Uttar Pradesh

(ii) M/s HSMC Technologies India Pvt. Ltd. (with ST Microelectronics and Silterra Malaysia Sdn. Bhd. as partners)

a) Project Cost: Rs 29,013 crore

b) Technology: 90/65/45/28/22 nm

c) Capacity: 40,000 WSPM

d) Location: Prantij, Gujarat

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 following main incentives will be extended:

i. 25% subsidy on capital expenditure and tax reimbursement as admissible under Modified Special Incentive Package Scheme (M-SIPS) Policy.

ii. Exemption of Basic Customs Duty (BCD) for non-covered capital items

iii. 200% deduction on expenditure on R&D as admissible under Section 35(2AB) of the Income Tax (IT) Act.

iv. Investment linked deductions under Section 35AD of the IT Act.

v. Interest free loan of approx. Rs 5124 crore each. (Exact amount to be calculated on Detailed Project Report appraisal.)