The government has approved the setting up of two plants to manufacture semiconductor chips in India by two business consortia, including Israel’s Tower Jazz-IBM and STMicroelectronics at a cost of around Rs. 63,412 crore.
Semiconductor is a hardware component, which is crucial to the functioning of various electronic devices such as, transistors, mobile phones, computers and hitech defence equipment. For instance, Tower Jazz manufactures electronic chips that are used in Apple’s iPhones and Samsung’s Galaxy smartphones.
One of the business consortiums consists of India’s Jaiprakash Associates, IBM and Tower Jazz. It plans to set up a plant at a cost of Rs.34,399 crore near the Yamuna Expressway in UP.
The other, which consists of France-based STMicroelectronics, HSMC Technologies (Hindustan Semiconductor Manufacturing Corporation) and Malaysia’s Silterra, will set up a plant in Prantij in Gujarat at a cost of Rs.29,013 crore, according to a government statement.
It is expected that the final agreements regarding both plants will be signed by August this year. The government has been working on a plan to reduce its costly import bill and manufacture some products, which are imported. The two plants are expected to help the country reduce its import bill by allowing manufacture of semiconductor chips locally. They will also create direct employment opportunities for around 22,000 people and indirect opportunities for a lakh more.
The government is offering 25% subsidy on capital expenditure, tax breaks and Rs.5,124 crore to each plant as interest-free loans in a bid to attract chip makers. The companies in the consortia will get all benefits listed under the National Policy on Electronics like Modified Special Incentive Package, which allows up to Rs.10,000 crore in benefits under the 12th Five Year Plan ending 2017. They will benefit under section 35 AD of I-T Act and will also be allowed to deduct 100% expenditure made on research and development for development of electronic chips. However, invitations for bids for the plants by the Department of Electronics and IT last year did not rake in more players except for the two consortia that were already in the reckoning to build the plants. It is estimated that these chipmaking plants will have a huge impact on the development of electronics system design and manufacturing in the country.
According to various estimates, India’s demand for electronics products is slated to reach $400 billion by 2020. Currently, it imports more than 90% of consumer electronic products and the imports are set to reach $300 billion by 2020 from just $7 billion last year.
Semiconductor is a hardware component, which is crucial to the functioning of various electronic devices such as, transistors, mobile phones, computers and hitech defence equipment. For instance, Tower Jazz manufactures electronic chips that are used in Apple’s iPhones and Samsung’s Galaxy smartphones.
One of the business consortiums consists of India’s Jaiprakash Associates, IBM and Tower Jazz. It plans to set up a plant at a cost of Rs.34,399 crore near the Yamuna Expressway in UP.
The other, which consists of France-based STMicroelectronics, HSMC Technologies (Hindustan Semiconductor Manufacturing Corporation) and Malaysia’s Silterra, will set up a plant in Prantij in Gujarat at a cost of Rs.29,013 crore, according to a government statement.
It is expected that the final agreements regarding both plants will be signed by August this year. The government has been working on a plan to reduce its costly import bill and manufacture some products, which are imported. The two plants are expected to help the country reduce its import bill by allowing manufacture of semiconductor chips locally. They will also create direct employment opportunities for around 22,000 people and indirect opportunities for a lakh more.
The government is offering 25% subsidy on capital expenditure, tax breaks and Rs.5,124 crore to each plant as interest-free loans in a bid to attract chip makers. The companies in the consortia will get all benefits listed under the National Policy on Electronics like Modified Special Incentive Package, which allows up to Rs.10,000 crore in benefits under the 12th Five Year Plan ending 2017. They will benefit under section 35 AD of I-T Act and will also be allowed to deduct 100% expenditure made on research and development for development of electronic chips. However, invitations for bids for the plants by the Department of Electronics and IT last year did not rake in more players except for the two consortia that were already in the reckoning to build the plants. It is estimated that these chipmaking plants will have a huge impact on the development of electronics system design and manufacturing in the country.
According to various estimates, India’s demand for electronics products is slated to reach $400 billion by 2020. Currently, it imports more than 90% of consumer electronic products and the imports are set to reach $300 billion by 2020 from just $7 billion last year.
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