Government reopens semiconductor incentive scheme, invites applications

The government has re-opened the window for applicants, both new and existing, to reapply for setting up of semiconductor and display fabrication units and to seek incentives from the Centre under the India Semiconductor Mission (ISM), the ministry of electronics and information technology said.

The window for applicants will be open from June 1 and will be kept open till the appropriate resources are there and the government gets good applications, the minister of state for electronics and information technology Rajeev Chandrasekhar told ET.


“The earlier window was open only for 45 days. There is no first-come-first-serve now and as such there is no race. If some multiple people or companies want to apply or re-apply to set up these units and seek incentives, they can do so, Chandrasekhar said.

On January 1, 2022, the government had opened the window for applicants to send proposals to set up semiconductor and display fabrication units in India. The government had then decided to stop accepting applications after February 15.

Till February 15 last year, the IT ministry had received applications from a Vedanta-Foxconn joint venture, Next Orbit Ventures, which has partnered with Israel’s Tower Semiconductor as well as Singapore-based IGSS Ventures.

With the re-opening of the application window, the ISM is also set to allow applicants to send proposals to set up units for the manufacture of mature nodes of 40 nm and above, Chandrasekhar said, adding that the government would also be open to the idea of increasing the overall incentive under the ISM.

“If it turns out there is more money or capital required, we will be open to that. The due process then will have to be followed of going to the Union Cabinet to seek the requisite approvals,” he said.

The government hopes that with the window being re-opened, there will be renewed interest from memory chip makers, packaging units, processors, and compound semiconductor fabrication units.

In December 2021, the government had announced an incentive scheme of Rs 76,000 crore to set up a semiconductor manufacturing and fabrication ecosystem in India. While initially the scheme proposed to give incentives depending on the technology being brought into the country, it was revised in October last year to give a flat 50% incentive to all players, irrespective of the technology and the nature of the nodes the applicant proposed to set up.

As per the ISM’s criteria, companies need to demonstrate clear expertise in the specialised field of semiconductor manufacturing to qualify for incentives. To receive government approval to set up a semiconductor fabrication in India, companies should either own a fabrication unit for semiconductor chips in the 65-28 nanometre range or possess the "production-grade licensed technologies".