Government Will Subsidise Chip Manufacturing By Up To 50 Percent

The contribution towards the project cost comes with caveats, including what size of chip will be produced

After having set aside Rs 76,000 crore to boost semiconductor manufacturing in India, the government has now spelled out detailed guidelines to put its plan into action.

The GoI will provide up to 50 percent of the project cost to those who establish a facility to make 28nm (nanometre) chips. The subsidy will be lowered to 40 percent for those looking to manufacture chips sized between 28nm and 45nm and it will be 30 percent for those manufacturing chips between 45nm and 65nm. For your consideration, 1nm is one-billionth of a metre.

Chips are made of transistors. The less the distance between two transistors, the smaller a chip can be. That is why the government is subsidising the 28nm chips the most to fasttrack the development and adoption of newer technologies. These are the chips most commonly used for processing units, graphic processors, connected technologies and by the automotive sector as well. Semiconductor production has risen in priority over the last couple of years due to the supply disruptions caused by the pandemic. Their shortage has affected almost every industry that uses electronic components, especially the automotive industry.

Also read: 5 Things You Should Know About The Semiconductor Shortage Affecting The Car Industry

There are some caveats to avail the support in the project cost rendered by the government.  Applicants will have to make a minimum investment of Rs 20,000 crore. They also need to have group revenue of at least Rs 7500 crore in electronic system design and manufacturing, in one of the last three years.

The scheme will be implemented through a nodal agency called the India Semiconductor Mission. While it has been green lit for a period of six years, the scheme’s tenure can be extended based on the approval of the electronics and IT minister.

Source