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IBM, STMicro consortia to set up chip fabs in India

Posted: 16 Sep 2013     Print Version  Bookmark and Share

Keywords:Cabinet  wafer fabrication  Jaiprakash Associates  IBM  TowerJazz 

The Government has approved setting up of two semiconductor wafer fabrication manufacturing facilities in the country. The first 'Made-in-India' chip is expected to be rolled out in the next two-three years.

The first fab facility has been proposed by Jaiprakash Associates along with IBM and Israel-based TowerJazz at Greater Noida.

The outlay of the proposed fab is about Rs.26,300 crore for establishing the facility of 40,000 wafer starts per month of 300 mm size, using CMOS technology. Technology nodes proposed are 90, 65 and 45 nm nodes in Phase I, 28 nm node in Phase II with the option of establishing a 22 nm node in Phase III.

The second one is by Hindustan Semiconductor Manufacturing Corporation (HSMC) along with STMicroelectronics and Malaysian company Silterra at Prantij, Gujarat.

The outlay of the proposed fab is about Rs.25,250 crore for the facility of 40,000 wafer starts per month of 300 mm size, using CMOS technology. Technology nodes proposed are 90, 65 and 45 nm nodes in Phase I and 45, 28 and 22 nm nodes in Phase II.

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The Government has also approved the package of incentives for the two consortia.

This package includes incentives already available under the Modified Special Incentive Package Scheme (M-SIPS) and deduction available for expenditure on R&D under the Income Tax Act.

In addition, the fabs will also be eligible for investment linked deduction under Section 35AD of the Income Tax Act. The Government will provide Viability Gap Funding (VGF) in the form of an interest free loan for a period of 10 years.

The Government has also required the technology providers to take equity of at least 10 per cent in the proposed projects. The Government will also get 11 per cent equity in the said projects.

"The details of the incentives will, however, be worked out based on appraisal of detailed project reports to be submitted by the two consortia within a period of two months," the cabinet said.

An Expression of Interest would be published inviting proposals from other leading companies intending to establish fab in India to be submitted in 4 weeks. Government of India would extend the special package of incentives to the qualified proposals.

The proposed fabs will create direct employment of about 22,000 and indirect employment of about one lakh.

In 2011, the Government constituted an Empowered Committee to identify technology and investors and to recommend incentives to be provided to set up two fab facilities in the country. The Empowered Committee had issued a Global Expression of Interest inviting technology providers and investors to set up the fab facilities. This Committee submitted its recommendations to the Government in March 2013.

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