Semiconductor makers in a flux over fab guidelines
The fledgling Indian semiconductor industry has raised concerns over ambiguity in the guidelines issued by the government last week for setting up chip manufacturing and allied units in India.
By Harsimran Singh, TNN |
NEW DELHI: The fledgling Indian semiconductor industry has raised concerns over ambiguity in the guidelines issued by the government last week for setting up chip manufacturing and allied units in India. The government released a special incentive package scheme (SIPS) to help companies set up chip manufacturing and allied units in India.
Now, companies like SemIndia and Hindustan Semiconductor Manufacturing (HSMC) along with the industry association Indian Semiconductor Association (ISA) have sought clarifications on these guidelines.
The SIPS has classified Assemble Test Mark and Package plants (ATMPs) as fab units. Fabs will require an investment around Rs 2,500 crore to be eligible for financial support. But companies feel that such a large amount is not needed to set up ATMP and they should be classified as ecosystem units and not under fabs. Ecosystems are units other than fabs for manufacturing LCDs, organic light emitting diodes (OLED) or plasma display panels (PDP).
The companies are in a dilemma about the calculation of net present value of a project. To calculate the NPV of a project, the government is taking a discount rate of 9% in the denominator. According to industry, the 9% rate is too steep. “The discount rate should have been benchmarked with international rate like Libor, which is about 6%. They should clarify this,” says Deven Verma of HSMC.
Now, companies like SemIndia and Hindustan Semiconductor Manufacturing (HSMC) along with the industry association Indian Semiconductor Association (ISA) have sought clarifications on these guidelines.
The SIPS has classified Assemble Test Mark and Package plants (ATMPs) as fab units. Fabs will require an investment around Rs 2,500 crore to be eligible for financial support. But companies feel that such a large amount is not needed to set up ATMP and they should be classified as ecosystem units and not under fabs. Ecosystems are units other than fabs for manufacturing LCDs, organic light emitting diodes (OLED) or plasma display panels (PDP).
The companies are in a dilemma about the calculation of net present value of a project. To calculate the NPV of a project, the government is taking a discount rate of 9% in the denominator. According to industry, the 9% rate is too steep. “The discount rate should have been benchmarked with international rate like Libor, which is about 6%. They should clarify this,” says Deven Verma of HSMC.
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