The Center on Wednesday lifted financial support for new semiconductor facilities to cover 50% of project costs and said it would remove a cap on the maximum investment allowed for display manufacturing as it strives to stimulate local production.
The announcement comes as the government seeks to attract more major investment as part of a $10 billion incentive scheme for chip and display production, aimed at making India a player key to the global supply chain.
“Based on discussions with potential investors, it is expected that work to set up the first semiconductor factory will begin soon,” said a government statement issued on Wednesday.
The government previously agreed to cover between 30% and 50% of the cost of setting up new display and chip factories. It said Wednesday that it would also cover 50% of the capital expenditure needed to set up semiconductor packaging facilities.
Vedanta is the third company to announce the establishment of a chip factory in India after international consortium ISMC and Singapore-based IGSS Ventures set up in Karnataka and Tamil Nadu respectively.
Last month, a joint study by the Indian Electronics and Semiconductor Association (IESA) and Counterpoint Research claimed that the Indian semiconductor market, valued at $119 billion in 2021, will grow at a compound annual rate of 19 % to reach $300 billion by 2026.
First post: STI