Govt extends deadline for 2 electronic chip manufacturing units

The government has granted extension till April 30, 2016 to two consortia led by Jaiprakash Associates and HSMC Technologies for submitting documents regarding setting up of electronic chip manufacturing plants with a cumulative investment of Rs 63,412 crore.

The Cabinet in February last year had approved setting up of two semiconductor wafer fabrication manufacturing plants.

The earlier deadline to submit documents was September 2015.

"Both consortia sought further extension of time for submission of documents required for demonstration of commitment. It was decided to grant extension to the two consortia till April 30, 2016 in the Empowered meeting held on November 23", an official in Communications and IT Ministry told PTI.

One of the plants would be set up by Jaiprakash Associates Ltd, with IBM and Tower Semiconductor of Israel as partners entailing an investment of Rs 34,399 crore. It would be located along the Yamuna Expressway in Uttar Pradesh and would have a capacity of 40,000 wafer starts per month (WSPM).

The other plant would be built by HSMC Technologies India Pvt in partnership with STMicroelectronics, Europe's largest semiconductor maker, and Silterra Malaysia Sdn Bhd.

The project would cost Rs 29,013 crore and have a capacity of 40,000 WSPM. It would be set up at Prantij in Gujarat.

The proposed units are expected to create direct employment for about 22,000 workers and indirect employment for about 1 lakh people and will boost the development of electronics system design and manufacturing in the country.

The government will provide incentives such as 25 per cent subsidy on capital expenditure and tax reimbursement, exemption from basic customs duty for non-covered capital items and 200 per cent deduction on expenditure on R&D.

Demand for electronic products in India is expected to rise about 10 times to reach USD 400 billion by 2020.