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Mon, Sep 26, 2022
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India raises semiconductor and solar module incentive

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

In a bid to push a self-reliant India and attract more investment in electronics manufacturing, India raised fiscal support for the semiconductor and display fabs investment and launched the second tranche of incentive policy on solar modules.

According to the Press Information Bureau of India, India announced a uniform rate of 50% for all semiconductor and display fab investments, including all technology nodes, display, compound semiconductors, silicon photonics, sensors, and OSAT/ATMP.

In addition, investments in manufacturing discrete semiconductors are now eligible for the INR7,600 billion (US$99 billion) semiconductor and display fab incentive policy. India removed the INR120 billion investment limit for setting up display fabs and allowed companies that manufacture nodes above 65nm to apply for the incentive scheme.

Earlier, India provided only fiscal support of 50% of the project cost for the 28nm technology node, while those who manufacture chips with 45nm and 65nm are eligible for 40% and 30% subsidy, respectively. Besides, investments in silicon photonics, sensors, MEMS, and OSAT/ATMP were previously eligible for a 30% subsidy.

According to the Indian government's press release, the advisory committee has unanimously recommended uniform support for all the above technologies, which was accepted by the government, citing reasons that technology nodes of 45nm and above have high demand, which is inter-alia driven by automotive, power, and telecom applications and constitutes around 50% of the total semiconductor demand.

According to Reuters and The Economic Times, Rajeev Chandrasekhar, minister of the state at the Ministry of Electronics and Information Technology of India, said by modifying the fiscal support, the Indian government is expecting to court at least US$25 billion in investments, adding that India is in talks with many of the global players to invest in India's semiconductor sector.

Vedanta-Foxconn JV applied for the incentive and would invest in 28nm chips used in smartphones and other advanced electronics. ISMC, which will initially invest US$3 billion in manufacturing widely-used 65nm analog chips, is now eligible for 50% fiscal support of the project cost instead of 30%. Singapore-based IGSS Ventures has not disclosed the technology nodes it will focus on.

Meanwhile, India also approved the INR195-billion National Program on High-Efficiency Solar PV Modules, which expects to bring 65GW manufacturing capacity of fully and partially integrated solar PV modules a year and attract INR940 billion in investment. India launched the first tranche of the high-efficiency solar module incentive policy with an outlay of INR450 billion in 2021.

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