New Delhi

The Union Government has announced modifications in the Rs 76,000-crore Production Linked Incentive (PLI) scheme for semiconductors by allowing uniform fiscal support of 50% of project cost for semiconductor fabs across the technology nodes as well as for compound semiconductors, packaging and other semiconductor facilities. Previously, the three schemes had an incentive range of 30-50%.

Union Cabinet on Thursday (September 22, 2022) approved the following modifications in the programme for development of semiconductors and display manufacturing ecosystem in India:

Under modified programme, a uniform fiscal support of 50% of project cost will be provided across all technology nodes for setting up of semiconductor fabs. Given the niche technology and nature of compound semiconductors and advanced packaging, the modified programme will also provide fiscal support of 50% of capital expenditure in pari-passu mode for setting up of compound semiconductors/silicon photonics/sensors/discrete semiconductors fabs and ATMP/OSAT.

The programme has attracted many global semiconductor players for setting up fabs in India. The modified programme, will expedite investments in semiconductor and display manufacturing in India. On the basis of discussion with potential investors, it is expected that work on setting up of the first semiconductor facility will commence soon.

An Advisory Committee comprising global experts from industry and academia was constituted to advise India Semiconductor Mission - the nodal agency for the programme for development of semiconductors and display manufacturing ecosystem in India. Advisory Committee has unanimously recommended uniform support for all technology nodes of silicon semiconductor fabs, silicon photonics, sensors, discrete semiconductor fabs and ATMP/OSAT, which has been accepted by the Government. The technology nodes of 45nm and above have high demand which is inter-alia driven by automotive, power and telecom applications. Moreover, this segment constitutes around 50% of the total semiconductor market.