Cabinet approves setting up of two semiconductor fabrication units

NEW DELHI: With an eye on stronger local electronic manufacturing, the government has approved plans for setting up two semiconductor fabrication units in the country, where investments of about Rs 25,000 crore is expected.

News agency PTI quoted communications & IT Minister Kapil Sibal as saying that the cabinet has in-principle accepted the two offers for setting up semiconductor plants. It was also approved that incentives that will be given to these players, will be offered to other players as well who are interested in setting up semiconductor plant here.

The two proposals approved by the cabinet are led by Israel's Tower Semiconductor Ltd. (TSEM) and by Franco-Italian STMicroelectronics N.V. (STM). While TSEM is partnered by IBM, STMicroelectronics is in partnership with Hindustan Semiconductor Manufacturing Corp

""The commencement of building the fab comes at a time when the Indian economy is at a point of inflection. It will arrest project costs from further escalation and will give the Indian electronic manufacutring ecosystem a boost to take their place as a leader in the global economy," said PVG Menon, President, India Electronics and Semiconductor Association.

The import bill of India's electronics has been rising steadily and is expected to overtake crude oil imports by 2020. The government estimates the electronics imports to to cost as much as $300 billion by then.