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
M/s Jaiprakash Associates
Limited (with IBM, USA and Tower Semiconductor Limited, Israel as partners)
Project Cost: Rs 34,399 crore
Technology: 90/65/45/28 nm
Capacity: 40,000 WSPM
Location: Yamuna Expressway, Uttar Pradesh
M/s HSMC Technologies India Pvt. Ltd. (with ST
Microelectronics and Silterra Malaysia Sdn. Bhd. as partners)
Project Cost: Rs 29,013 crore
Technology: 90/65/45/28/22 nm
Capacity: 40,000 WSPM
Location: Prantij, Gujarat
Letter of intent will be issued to the
two consortia by March 31, 2014. The final agreements are expected to be signed
by August 2014. 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
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
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
v. Interest free loan of approx. Rs 5124 crore each. (Exact amount to be calculated on Detailed Project
The Government had in 2011 constituted an Empowered Committee (EC) to
identify technology and investors and to recommend incentives to be provided to
set up two FAB facilities in the country. The Empowered Committee had issued a
Global Expression of Interest inviting technology providers and investors to
set up the FAB facilities. This Committee submitted its recommendations to the
Government in March 2013. The Cabinet, at its meeting held on 12.9.2013,
considered the recommendations of the EC and accorded ‘in-principle’ approval
to the two consortia referred to above and to the package of incentives. The
Cabinet also decided that all other FAB manufacturers may also be appropriately
and fully apprised of the quantum of subsidy/other benefits/support being
offered for establishing FAB facilities in India. Such manufacturers may be
asked to indicate their interest / send their responses on specified parameters
to the Department of Electronics and Information Technology (DeitY) within a period of four weeks.
As decided by the Cabinet, the second Expression of Interest (EoI) was published, which clearly specified the project
parameters required as well as the package of incentives being offered by
Government of India. 106 potential FAB manufacturers across the world were also
directly addressed. No new proposal has been received for setting up of a FAB as
per EoI requirements. The steps taken pursuant to the
aforesaid Cabinet decision have doubly assured the transparency of the entire
process and also ensured a level playing field.