The Uttar Pradesh government has announced a semiconductor policy to leverage the growing market of electronic gadgets that use microchips.
With the policy, the state will also tap the flagship central kitty of $10 billion to promote semiconductor fabrication in India.
Semiconductors are used in the production of miniature electronic devices such as diodes, transistors and integrated circuits, which run consumer electronics such as smartphones, modern cars, TV, computers etc.
The domestic semiconductor demand is projected to jump 10 times from $10 billion in 2020 to $100 billion by 2025. Nearly 12 companies have evinced interest to set up their semiconductor plants in the state.
Armed with the policy, UP has joined the league of Gujarat, Odisha and Tamil Nadu, who have a dedicated policy for the cutting edge semiconductor fabrication.
The policy offers various incentives including 100 percent stamp duty exemption on registration of land. The state would provide a 75 percent land subsidy on 200 acre plots. On additional land, the subsidy would be 30 percent.
Moreover, companies investing up to Rs 200 crore would be eligible for 5 percent annual interest subsidy. The investors would also get a subsidy of up to Rs 10 crore for R&D on semiconductors.
As India depends upon semiconductor imports, the Centre is encouraging states to ramp up domestic fabrication with its performance-linked incentive (PLI) scheme, which is aimed at catalysing semiconductor value chain viz. design, manufacturing, packaging and testing of microchips.
Global semiconductor market is projected to grow at a compounded rate of 12 percent from $574 billion in 2022 to touch $1.38 trillion by 2029. The burgeoning market of electronic devices and products is fueling the stupendous growth of semiconductors.
Earlier, the Yogi Adityanath government had provisions for semiconductors in the UP Electronics Manufacturing Policy 2020, which targetted investment of Rs 40,000 crore and creating 400,000 jobs.
The policy bore fruits with top companies including Microsoft, MAQ, Adani Group, Hiranandani Group, Netmagic Services, STT and Agarwal Associates announcing to invest in the new age sectors such as data centres in UP.