Union Cabinet Approves Major Changes To Semiconductor PLI Scheme: Report

Union Minister Anurag Thakur announced on Wednesday that the Union Cabinet has granted 50% financial incentives for the manufacture of semiconductor fabs across technological nodes, as well as compound semiconductors, packaging, and other chip facilities. Announcing the decision of the Cabinet, Union Minister Anurag Thakur said the modifications will strengthen the semiconductor scheme, thus raising […]

Union Minister Anurag Thakur announced on Wednesday that the Union Cabinet has granted 50% financial incentives for the manufacture of semiconductor fabs across technological nodes, as well as compound semiconductors, packaging, and other chip facilities.

Announcing the decision of the Cabinet, Union Minister Anurag Thakur said the modifications will strengthen the semiconductor scheme, thus raising capacities within the country, encouraging investments, and creating employment opportunities.

Thakur said due to supply-chain disruption, many countries have announced financial incentives to companies for semiconductor manufacturing. As a result, he claims, the government has altered the existing plan in order to attract businesses.

Previously, the government promised 30-50 percent bonuses for several categories. However, the incentive has now been frozen at 50% across the board. Also, the incentive was previously limited to 65 nm diameters, but this restriction has since been lifted, and all sizes will be covered.

In an earnest attempt to double down on the government’s endeavour to make India a worldwide electronics manufacturing powerhouse, the Cabinet unveiled a Rs 76,000-crore incentive scheme for chipmakers last year.

The Cabinet has also authorised the Production Linked Incentive (PLI) Scheme on the ‘National Programme on High-Efficiency Solar PV Modules’ in order to achieve Giga Watt (GW) manufacturing capacity in High-Efficiency Solar PV Modules, said Union Minister Anurag Thakur.

Under the PLI Scheme, a provision of Rs 19,500 crore has been established for reaching Giga Watt manufacturing capability (Tranche II). According to Thakur, the government’s goal is to build an environment for the manufacture of high-efficiency Solar PV Modules.

The Semiconductor PLI programme aims to provide attractive incentive support to companies/consortia engaged in Silicon semiconductor fabs, display fabs, compound semiconductors / silicon photonics / sensors (including MEMS) fabs, semiconductor packaging (ATMP / OSAT), Semiconductor Design.

In May this year, the international semiconductor consortium ISMC announced that it will invest $3 billion to build a fab in India in partnership with Israel-based Tower Semiconductor (which is among the top 10 pure-play foundries of the world and is in the process of being acquired by Intel).

The consortium signed a memorandum of understanding (MoU) with Karnataka to set up a semiconductor manufacturing plant near Mysuru. It is reported to be seeking approval and grant of the incentives by August to move forward with project execution.