ICCK

The centre will launch a revised incentive scheme of up to Rs 10,000 crore to promote the establishment of electronic and semiconductor component plants in the country, top officials told ET. The move is aimed at creating a supporting ecosystem for the mega chip- packaging units being set up by the likes of US-based Micron as well as Indian conglomerate Tata Group and Kaynes Corp that marks the first leg of India’s ambitious journey to emerge as a global hub for electronics manufacturing and design.

The new incentive plan--which is likely to be launched at the start of the next fiscal year-- will be an updated version of the current Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). It may be structured to provide funds on a ‘pari-passu’ basis instead of the current reimbursement method, officials said.

The pari-passu or equal footing method for disbursal of incentives is one where the government releases the funds to successful applicants as and when they invest or achieve certain milestones.

In addition to the ATMP (assembly, testing, marking, packaging) plants announced by Micron, Tata Electronics and Kaynes Corp others like the HCL Group and Tamil Nadu-based Murugappa Group are also finalising their plans to enter the sector.

“To support these ATMP plants, (several) ancillary industries and component makers are coming to India and are requesting support from the government,” said an official in the know of the developments. The ancillary units include those providing raw materials including speciality chemicals and gases used in the process of fabrication, assembly, marking, testing, and packaging of semiconductor chips.

With America’s Micron having received necessary approvals from the centre to set up an ATMP unit at Sanand in Gujarat, there has been an influx of companies-- supplying specialised chemicals, gases, integrated circuit packaging substrate, purified air and other equipment—also looking to set up allied units in the area to support the semiconductor major. These firms have been scouting for land near the Micron unit and are also looking for support from the government, according to officials who pointed out that “ similarly, wherever new chip fabrication units come up, such ancillary units will have to be set up.”

Link