Lok Sabha Question No. 4547 (UNSTARRED), answered on 2017-03-29
Subject: Semi-Conductor Units
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: KANWAR SINGH TANWAR

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO.4547

TO BE ANSWERED ON 29.03.2017

## SEMI-CONDUCTOR UNITS

## 4547       SHRI KANWAR SINGH TANWAR:

Will the Minister of Electronics and Information Technology be pleased to state:

- (a) the details of assistance, financial and otherwise, provided or proposed for setting up of Semi-Conductor Wafer Fabrication (FAB) units;
- (b) the  progress  made  in  setting  up  of  Semi-Conductor  Wafer  Fabrication  (FAB) manufacturing facilities in the country;
- (c) whether the Government is considering to set up such FAB facilities in various States and if so, the details thereof and the action taken in this regard; and
- (d) the locations identified for setting up of FAB manufacturing facilities in the country and the criteria adopted for the same?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI P. P. CHAUDHARY)

(a),  (b)  and  (c):  Letters  of  Intent  (LoI)  dated  19.03.2014  were  issued  to  the  two  business consortia,  one  led  by  M/s.  Jaiprakash  Associates  Limited  (with  IBM,  USA  and  Tower Semiconductor Limited, Israel as partners and proposed location as Uttar Pradesh) and the other led by M/s. HSMC Technologies India Pvt. Ltd. (with ST Microelectronics and Silterra Malaysia  Sdn.  Bhd.  as  partners  and  proposed  location  as  Prantij,  Gujarat)  for  setting  up Semiconductor  Wafer  Fabrication  (FAB)  facilities.  The  following  main  incentives  were extended to both the consortia for setting up of FAB facilities in India:

-  25%  subsidy  on  capital  expenditure  and  tax  reimbursement  as  admissible  under Modified Special Incentive Package Scheme (M-SIPS).
-  Exemption of Basic Customs Duty (BCD) for non-covered capital items
-  Deduction  on  expenditure  on  R&D  as  admissible  under  Section  35(2AB)  of  the Income Tax Act
-  Investment linked deduction under Section 35AD of the Income Tax Act
-  Interest Free Loan of approx. Rs.5,124 Crore each or  20% of the capital expenditure, as admissible under M-SIPS, whichever is lower, (Exact amount to be calculated on appraisal of Detailed Project Reports).

As per  Letter  of  Intent  (LoI),  both  the  consortia  were  required  to  take  certain  actions  and submit the requisite documents, as enunciated in the LoI for demonstration of commitment. Both  the  consortia  sought  extensions  on  multiple  occasions  for  submission  of  requisite documents for demonstration of commitment, which were provided to them. The consortium led by M/s. Jaiprakash Associates Ltd. withdrew from the project on 02 nd March, 2016. The consortium led by M/s. HSMC Technologies India Pvt. Ltd. was given a final extension until 28 th February,  2017  for  submission  of  the  documents  for  demonstration  of  commitment.

However, the consortium led by M/s. HSMC Technologies India Pvt. Ltd. has not submitted the requisite documents for demonstration of commitment. (d): The location for setting up FAB facilities was proposed by the consortia themselves.

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