The Hindu Business Line : Norms for semiconductor policy issued

New Delhi, Sept. 14 The Government on Friday issued guidelines for the operation of semiconductor manufacturing policy, paving the way for companies such as Hindustan Semiconductor Manufacturing Corporation (HSMC) and SemIndia to formally apply for incentives under the scheme.

The guidelines provide definitions of a fab (a factory that takes raw silicon wafers and creates chips with them), eco-system unit, latest technology, Net Present Value (NPV), financial closure, capital expenditure and threshold limit.

Appraisal committee

Investors would need to submit a proposal to an appraisal committee along with the feasibility report, an official release said, adding that a non-refundable application fee of Rs 25 lakh has been prescribed.

The appraisal committee would make its recommendations to the Centre, and the approval of the project under the scheme would be given by the Government.

“Investments made before the date of receipt of applications and investment in land made more than six months before the date of receipt of application will not be considered for calculation of capital expenditure,” the release said.

It may be recalled that Special Incentive Package Scheme (SIPS) was announced by the Government in February this year to encourage investments for setting-up semiconductor fabrication and other micro and nano technology manufacture industries in India.

Under the scheme, the Centre or its agencies would provide incentive of 20 per cent of the capital expenditure during the first 10 years for the units in SEZs, and 25 per cent of the capital expenditure for non-SEZ units. Non-SEZ units would be exempt from counter veiling duty (CVD).

For semiconductors, the threshold Net Present Value of the investment was pegged at Rs 2,500 crore, while the same in the case of products such as liquid crystal displays (LCDs), organic emitting diodes, plasma display panels, storage devices, photovoltaic and other advanced micro and nano technology products and assembly was Rs 1,000 crore.

Already companies, including SemIndia and HSMC, are gearing up to establish chip-making units in India, and it is estimated that the country could attract $6-$9 billion investment in various fabs.

On the photovoltaic side — which is also covered under the scheme — California-headquartered Signet Solar is planning to pump in $2 billion to manufacture solar photovoltaic modules in India, while Moser Baer has announced its plans to establish a thin film solar fab in Noida SEZ at an investment of $250 million.

“For projects approved by the Government, the applicant while submitting the proposal for incentives other than equity contribution must ensure the requests are accompanied by the report of the annual audited accounts and a certificate from the auditors of the company.

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