Government modifies PLI scheme for semiconductors

The Centre on Wednesday modified the scheme for semiconductors and display manufacturing ecosystem, with uniform fiscal support of 50 per cent of project cost for all technology nodes under the ambitious programme.

The Union Cabinet chaired by Prime Minister Narendra Modi approved the changes in the scheme, Union Minister Anurag Thakur told media after the Cabinet meeting.

Due to supply-chain disruption, many countries have announced financial incentives to companies for semiconductor manufacturing. Therefore, the government has tweaked the existing scheme to attract companies, the Minister said.

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The government approved uniform fiscal support of 50 per cent of project cost for semiconductor fabs across technology nodes and display manufacturing and also raised fiscal support for compound semiconductors, packaging and other semiconductor facilities to 50 per cent from 30 per cent.

Under the modified scheme, fiscal support of 50 per cent of project cost for all technology nodes for setting up semiconductor fabs in India will be provided by the government. Fiscal support of 50 per cent of the project cost will be provided for setting up of display fabs as well, said that statement.

Fiscal support of 50 per cent of capital expenditure will be given for setting up of compound semiconductors/ silicon photonics/ sensors fab and semiconductor ATMP or Assembly, Testing, Marking, and Packing facilities or OSAT, or outsourced assembly and testing facilities, in the country.

In December 2021, the Centre announced Rs 76000 crore scheme for the development of the semiconductors and display manufacturing ecosystem in India. Earlier, the Government had announced 30-50 per cent incentives for different categories. However, the incentive has now been kept flat at 50 per cent for all categories.

Given the niche technology and nature of compound semiconductors and advanced packaging, the modified programme shall provide fiscal support of 50 per cent of capital expenditure for setting up of compound semiconductors/silicon ph / discrete semiconductors fabs, the statement said.

"The programme has attracted many global semiconductor players for setting up fabs in India. The modified programme will expedite investments in semiconductor and display manufacturing in India," it added.