Lok Sabha Question No. 609 (UNSTARRED), answered on 2019-02-06
Subject: Wafer Fabrication Facility
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: ALOK SANJAR

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 609

TO BE ANSWERED ON: 06.02.2019

## WAFER FABRICATION FACILITY

## 609.     SHRI ALOK SANJAR:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be please to state:-

- (a) whether  the Government  proposes  to  set up semiconductor  wafer  fabrication manufacturing facilities in the country;
- (b)   if so, the details thereof;
- (c)    whether the Government has taken any step to promote manufacturing of semiconductor wafer in the country; and
- (c) if so, the details thereof?

## ANSWER

MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI S.S. AHLUWALIA)

- (a): No, Sir.
- (b): Does not arise.

(c) and (d):  Based on the recommendations of the Empowered Committed (EC) constituted for  the  purpose  of  setting  up  of  Semiconductor  Wafer  Fabrication  (FAB)  manufacturing facilities  in  the  country,    Government  had  approved  two  proposals  for  setting  up  of Semiconductor Wafer Fabrication (FAB) facility in India - one from the consortium led by M/s.  HSMC  Technologies  India  Pvt.  Ltd.  and  the  other  from  consortium  led  by  M/s. Jaiprakash Associates  Ltd.  Letter of  Intent  (LoI)  dated  19.03.2014  were  issued  to  both  the consortia.  As  per  the  LoI,  both  the  consortia  were  required  to  submit  the  documents  for demonstration  of  commitment.  The  consortium  led  by  M/s.  Jaiprakash  Associates  Ltd., withdrew  the proposal on 02.03.2016, whereas the  consortium  led  by  M/s.  HSMC Technologies India Pvt. Ltd. could not submit the requisite documents as per the LoI, despite being  provided  extension  of  time  on  multiple  occasions.  Therefore,  LoI  issued  to  the consortium led by M/s. HSMC Technologies India Pvt. Ltd. was cancelled on 20.04.2018.

Besides the above, in order to attract investment for setting up semiconductor FAB facilities in  the  country,  capital  subsidy  of  25%  of  Capex  for  units  set  up  in  Domestic  Tariff  Area (DTA) and 20% of Capex for units set up in Special Economic Zones (SEZs) was available under the Modified Special Incentive Package Scheme (M-SIPS). The scheme was open to receive applications till 31.12.2018. However, no proposal has been received for setting up semiconductor FAB facilities in the country under M-SIPS.

Following  benefits continue to be available for  promoting  investment  in setting  up semiconductor FAB facilities in the country:

- (i) Machinery, electrical equipment, other instruments and their parts except populated Printed Circuit Boards for use in fabrication of semiconductor wafer are exempted
- from  Basic  Customs  Duty  (BCD)  vide  S.No.422  of  Notification  No.50/2017Customs dated 30.06.2017, as amended from time to time.
- (ii) Investment linked deduction under Section 35AD of  the Income-tax Act has been extended to semiconductor wafer fab manufacturing unit.
- (iii) Deduction of expenditure on research and development as admissible under Section 35(2AB) of the Income-tax Act.

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