Ahmedabad, 3 September 2014

The Government of Gujarat has finalized a piece of 1,000 acre land for Semiconductor Wafer Fabrication(FAB) manufacturing facility at Vagpur village of Prantij taluka near capital Gandhinagar. According to government officials close to this development, government will offer facilities like 250 MW power and 300 lakh liter water/year.The project has been put on fast track. France’s ST Micro Electric Company and Malaysia’s Silterra are part of this project.

It should be mentioned that Gujarat is going to focus on electronics manufacturing in full force in near future. Recently state Science and Technology Minister Bhupendrasinh Chudasama during his visit to Delhi had announced that Gujarat would set up five greenfield and three brownfield electronic clusters by 2015. Similarly, state Finance Minister saurabh Patel had recently announced government’s intention to announce policy for electronics manufacturing in one and half month.

Background:

In year 2011, the Government of India constituted an Empowered Committee to identify technology and investors and to recommend incentives to be provided to set up two FAB facilities in the country. The Empowered Committee had issued a Global Expression of Interest inviting technology providers and investors to set up the FAB facilities.

In March 2013, this Committee submitted its recommendations to the Government.

In September 2013, the Government of India approved setting up of two Semiconductor Wafer Fabrication(FAB) manufacturing facilities in India. One of the units was proposed to be set up in Gujarat.

The Cabinet has approved setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities in India through two business consortia. One of them was proposed in Gujarat, details of which are following:

(ii) M/s HSMC Technologies India Pvt. Ltd. (with ST Microelectronics and Silterra Malaysia Sdn. Bhd. as partners)

a) Project Cost: Rs 29,013 crore

b) Technology: 90/65/45/28/22 nm

c) Capacity: 40,000 WSPM

d) Location: Prantij, Gujarat

In March, 2014, the Government issued Letter of intent to consortia. The final agreements were expected to be signed by August 2014.

The Government of India in a statement in February 2014 said:

These FABs will have a big impact on the development of Electronics System Design and Manufacturing eco-system across the country. This will help set up a critical pillar required to promote Electronics System Design and Manufacturing in India. The Semiconductor Wafer Fabrication units when set up, will stimulate the flow of capital and technology, create employment opportunities, help higher value addition in the electronic products manufactured in India, reduce dependence on imports, and lead to innovation.

The following main incentives will be extended:

i. 25% subsidy on capital expenditure and tax reimbursement as admissible under Modified Special Incentive Package Scheme (M-SIPS) Policy.

ii. Exemption of Basic Customs Duty (BCD) for non-covered capital items

iii. 200% deduction on expenditure on R&D as admissible under Section 35(2AB) of the Income Tax (IT) Act.

iv. Investment linked deductions under Section 35AD of the IT Act.

v. Interest free loan of approx. Rs 5124 crore each. (Exact amount to be calculated on Detailed Project Report appraisal.)

Gujarat to have Semiconductor Wafer Fabrication manufacturing facility

Semiconductor Wafer Fabrication Manufacturing in Gujarat: Final agreement in August