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Guidelines for financial package on chip making issued

Posted: 19 Sep 2007     Print Version  Bookmark and Share

Keywords:manufacturing guidelines  India chip manufacturing  solar cell manufacturing 

Six months after the announcement of a framework for semiconductor, LCD, solar cell and other electronics manufacturing in India, potential manufacturers can now start applying under the guidelines dubbed the "Special Incentive Package Scheme" (SIPS).

India's chip policy was unveiled February, but specifics for applying for financial incentives under the scheme didn't emerge until Sept. 14.

SemIndia Inc., the first major semiconductor manufacturer to emerge, is expected to apply in a few weeks. Others, such as Hindustan Semiconductor Manufacturing Corp., Videocon Industries, Moser-Baer, Signet Solar and the Nest Group are also all expected to apply soon.

"This is an encouraging step forward. We will now be studying how this compares to similar policies announced by other countries for manufacturing high-tech products," said Poornima Shenoy, president of the India Semiconductor Association.

An appraisal committee will study applications. The first three projects to be approved will be eligible for incentives under the program.

SIPS "could well do for the electronics manufacturing industry what the Software Parks of India scheme did for the country's software exports industry in 1992, by galvanising it," predicted B.V. Naidu, managing director of SemIndia Pvt Ltd.

SemIndia will apply under the guidelines in the next few weeks, Naidu said. "Domestic demand is on the upswing for electronics," he added. "So the guidelines could not have come at a better time."

A screening committee will recommend applicants for government approval. Only companies able to attract investment will be considered, the guidelines said.

The guidelines define a fab as a plant that uses raw silicon wafers to make chips. LCD displays, plasma panels, solar cells and other manufacturing will be considered "ecosystem" units.

The guidelines call for the government to bear 20 per cent of the cost for the first decade if the plant is located in a special economic zone. For chipmakers, the threshold investment must be about Rs.2,426.90 crore ($600 million), and Rs.1,011.21 crore ($250 million) for manufacturing other products.

- K.C. Krishnadas
EE Times

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