Chip testing incentives may significantly fall as India chases bigger ambitions
Subscribe to enjoy similar stories. 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. Chip fabs take semiconductor wafers and build chips out of them with specialized equipment.
OSAT then test these chips and wire them up so they can be installed in products. “We already have three such facilities approved by the ISM, and two more with state-level approvals.
The rest of the OSAT industry can go through a natural course of evolution, with lower levels of central support," the person cited above added. Data sourced by Mint exclusively from market researcher and consultant Gartner pegged the value of OSATs, which are the primary facilities for any country to build a semiconductor ecosystem,
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