LG And Samsung Considering To Set Up Semiconductor Units In India

electronic chips

New Delhi, February 16, Abhijit Saha: After the government’s clearance to build two semiconductor units, LG and Samsung are mulling over to set up units to manufacture electronic chips in India.

Joon-gyu Lee Republic of Korea’s Ambassador to India said that the Indian government wants to get companies like LG and Samsung, which manufacture semiconductors, to start this operation in India.

The Cabinet approved setting up of two semiconductor units last week, requiring an investment of Rs 63,410 crore. Jaiprakash Associates and Hindustan Semiconductor Manufacturing Corporation (HSMC) each would be set a unit.

Till now India does not have any semiconductor plant. These are the main hardware component for functioning of devices such as mobiles and computers as well as hi-tech defence equipment.

China is leading over India in this sector with about 100 facilities. Electronic products demand in India is expected to rise about 10 times to reach USD 400 billion by 2020.

25% subsidy on capital expenditure and tax reimbursement has been announced by India under Modified Special Incentive Package Scheme Policy and exemption of basic customs duty for non-covered capital items for companies setting up semiconductor plants.

Tower Jazz and IBM investing in India as partner of the Jaiprakash Associates, were ranked 6th and 7th in terms of revenue in global market, as per market research firm Gartner. HSMC also has ST Microelectronics and Silterra as partners.

These companies will also be eligible for a deduction of 200% on expenditure of research and development under Section 35(2AB) of the Income Tax (IT) Act and investment-linked deductions under Section 35AD of the IT Act. Approximately Rs 5,124 crore interest free loans will also be provided by the government to each facility.