Govt. to bear 50% of the project cost to setup chip plant

The government's share will not exceed 49% of the total project equity.

Last week, the government of India announced a Rs 76,000 crore incentives scheme to promote chip manufacturing in the country. According to the fine print, the government will provide up to 50% of the project cost to companies looking to set up semiconductor factories.

The government will bear up to 50% of the cost of setting up a facility to fabricate chips of up to 28 nm, up to 40% for chips of 28 nm to 45 nm and up to 30% for chips of 45 nm to 65 nm.

Companies looking to set up a chip manufacturing unit in India will have to make a minimum capital investment of Rs. 20,000 crore. The applicants are required to have a minimum revenue of Rs. 7,500 crore.

Semiconductor manufacturing industries will receive government support for 6 years. However, the tenure of the actual fiscal support outflow could be extended. If the government provides fiscal support through equity, its share will not exceed 49% of the total project equity.

Source: ET Auto