India Plans Rs 10,000 Cr Revamped Scheme For Domestic Semiconductor Component Manufacturing

New Delhi, Dec 15 (KNN) India is considering to come up with a Rs 10,000 crore revised incentive scheme providing a major boost to the manufacturing of local electronic and semiconductor component plants within the country, reported ET.

This initiative aims to promote a supportive ecosystem for mega chip-packaging units being established by global entities such as US-based Micron, India's Tata Group, and Kaynes Corp.

Government officials having knowledge of the matter told ET that the new incentive plan, a revised iteration of the existing Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), is likely to be launched early next year.

The new scheme would shift from the prevailing reimbursement approach to a 'pari-passu' method for fund allocation. Under the 'parri passu' method, the government releases funds to those firms either proportionate to their investment or on successful completion of specific milestones, officials told ET.

After Micron, Tata Electronics, and Kaynes Corp announced their ATMP plants (assembly, testing, marking, packaging), other players like the HCL Group and Murugappa Group from Tamil Nadu are also finalising their entry into the sector, the report added.

Thus, ancillary industries involved in supplying raw materials, including speciality chemicals and gases essential for the chip fabrication process, are actively seeking government support.

At present, SPECS provides reimbursement of up to 25 per cent of the total capital expenditure post-project completion. Officials told the paper, there could be a possible tripling or doubling of the scheme's current corpus (around Rs 3,200-3,300 crore), to accommodate the anticipated surge in applications and investment interest.

The revised incentive plan will also introduce provisions to stimulate increased research and development (R&D) in the sector, aiming to encourage MSMEs and start-ups already engaged or interested in chemical and gas-related R&D for the semiconductor industry.

(KNN Bureau)