The government wants to attract more chip-making units by offering a new semiconductor incentive package

Semiconductors: After the almost complete exhaustion of the Rs 76,000-crore plan, which was started in December 2021, the Indian government is about to introduce a massive multibillion dollar incentive package targeted at semiconductor manufacturing businesses. Preliminary efforts for the new package are anticipated to exceed the previous one, according to a TOI article. Formal declarations for the transition to post-election government are scheduled, but the urgency is due to growing suggestions that call for urgent state guarantees in the form of incentives.

Justification for a Novel Incentive Plan
The upcoming release of a new package is a result of the December 2021 initiative’s success, which gave qualified semiconductor fabricators and display makers financial help of up to 50% of project expenses. This assistance was almost depleted by an increase in investments. In addition, India has to respond forcefully to stay afloat in the semiconductor manufacturing market given the competitive environment, which is characterized by the US and China’s strong investment attitudes.

India has made great progress in semiconductor production recently, which is a break from previous efforts. It was a turning point when American Micron entered the market in June of last year with a Rs 22,500-crore testing and packaging facility in Gujarat. A potential change in India’s semiconductor goals was indicated by the clearance of subsequent projects costing about Rs 1.3 lakh crore in February of this year. These projects included the Rs 91,000-crore semiconductor fab unit in Gujarat by Tata Electronics and the Semiconductor Assembly and Test (TSAT) facility in Assam by Tata.

New Initiatives and Critical Needs
The advanced-stage suggestions that have been received by the government highlight the urgent necessity for prompt action. The proposal by Japanese company Sharp to build the nation’s first display fabrication plant, valued at Rs 40,000 crore, stands out among the others. The anticipated Rs 90,000 crore investment by Israel’s Tower Semiconductors highlights the increasing interest in India’s semiconductor industry. Clarifying incentive support is crucial, as businesses need certainties in order to go forward with their investment plans.