Key Points
Central government support to upcoming semiconductor assembly and testing factories is set to shrink by more than half, in a development that experts say signals a shift towards prioritizing greater value-added offerings instead..
The India Semiconductor Mission (ISM) will reduce fiscal support for capital expenditure on setting up OSAT (outsourced semiconductor assembly and testing) factories from 50% earlier to 20% for the duration of construction of the projects, according to four people with direct knowledge of the matter..
ISM is the nodal body within the Indian government implementing the financial incentives scheme for setting up semiconductor fabrication and packaging units..
The intention of the Centre is to now look for greater value-added offerings in the semiconductor industry, for which the upcoming semiconductor incentives will look to prioritize display fabs, chip fabs, and the semiconductor components supply chain," the first person cited above said, requesting anonymity since the fresh incentives proposal for the semiconductor industry is currently with the Union cabinet...
This would be a crucial step towards improving the value addition of Indias semiconductor industry, which is why it would be important for the Centre to focus its resources on developing this bit," this person said, adding that OSATs have already started coming up, and the reading is that they will grow autonomously..
