The Hindu : Business : In-principle nod for fab policy

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Friday, Jan 12, 2007
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In-principle nod for fab policy

Special Correspondent

NEW DELHI: The Union Cabinet on Thursday gave in-principle approval for the semi-conductor policy that seeks to provide incentives to hi-tech companies proposing to set up chip manufacturing facilities in India. "The Cabinet gave its in-principle approval for giving special incentives to attract semi-conductor companies to set up fabs in hi-tech areas,'' Information and Broadcasting Minister P. R. Dasmunsi told newspersons after the meeting.

Special incentives

The special incentives will be available to companies till March 2010 but finer details to implement the policy would be worked out later by the Prime Minster's Office and the Cabinet Secretary. The details pertain to the threshold limit, incentive package and subsidy.

As per a Frost & Sullivan study, India will consume $36 billion of semi conductors in 2015, amounting to six per cent of the market. Its present production capacity is negligible as the only substantial chip manufacturer, the public sector Semi Conductors Limited, Chandigarh, supplies mainly to the Department of Space. However, chip makers such as Intel and AMD (through technology transfer to Sem India, an NRI consortium) have expressed interest in setting up units in the country.

Of them, Sem India plans to set up a $3 billion plant in Hyderabad but has expressed a desire for Government assistance.

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