HYDERABAD: From idea to reality, it took over two years of tactical lobbying by the industry to shape the National Semiconductor Policy announced by Union IT minister Dayanadhi Maran on Thursday.
The announcement says the Centre will subsidise investors up to 20% of the capital cost for units being set up in SEZs and 25% for non-SEZ units for a period of 10 years.
The minimum investment threshold for being eligible for these incentives has been set at Rs 2,500 crore for chip units and Rs 1,000 crore for other semiconductor- related units.
This subsidy will be available in the shape of tax breaks, zero interest loans and interest rate subsidies. In addition, non-SEZ units will be exempt from paying countervailing duties.
Units involved in the manufacture of all semiconductors, displays including liquid crystal display (LCD), organic light emitting diodes, plasma display panels, and other emerging displays, storage devices, solar cells and photovoltaic and other advanced micro and nano-technology products, their assembly and test, will be eligible for the incentives.
“We are happy with what has been announced,” said Poornima Shenoy, president, India semiconductor Association (ISA). The full details are not yet known, she added.
The industry had actually asked for a 25% capital subsidy for SEZ units but got 20%. And then it is also not clear if finance minister P Chidambaram has agreed to other demands like setting up of a Rs 10,000 crore government fund with a three- year window period for equity participation up to 26% in semiconductor projects.
It is also not clear if the 20% subsidy is in addition to the other benefits available to SEZ units. And the statement from the minister is also silent on the demand for an R&D grant to semiconductor units up to a specified limit.
“The red carpet has been rolled out,” Maran told reporters in Delhi, announcing that an estimated investment of at least $10 billion should come into the country thanks to the policy. “Several multinationals are in talks with us,” he added.
“The policy announcement will give a major fillip to hi-tech manufacturing which can become a significant contributor to the Indian economy,” said Vinod Agarwal, chairman and CEO, SemIndia, who is setting up a $3 billion wafer fab and assembly, test and mark up plant in Hyderabad.
Similarly, NRI-promoted Tessolve Services that specialises in test development, failure analysis and reliability test for semiconductors is setting up ATMP plants near Chennai, Bangalore and exploring the possibility of one in Hyderabad too. And then there is South Korean entrepreneur June Min who has kicked off efforts to set up a $600 million fab in the city.
The attraction for companies like these and perhaps some multinationals is clearly the huge demand for chips from the domestic consumer electronics market. A Frost & Sullivan study released by the ISA estimates the domestic market for electronics goods to reach $363 billion by 2015, resulting in a demand for semiconductors alone worth $43 billion. Sometime ago, Intel had set up a unit in Israel instead of India due to the lack of clarity in government policy.
At a time when industry pundits are predicting an overcapacity in the global computer chips in a few years, it remains to be seen if the new policy will prompt companies like Intel to look to India again. If SemIndia has its way it should be so. “Now that we have a fix on the policy we will kick off a road show to promote the FabCity across the world,” SemIndia Fab City’s managing director B V Naidu said.
http://www.dnaindia.com/report.asp?NewsID=1081564
Posts
No comments:
Post a Comment