The Gujarat Semiconductor Policy 2022-27 encompasses several strategic measures to encourage entrepreneurs to invest in the semiconductor and display fabrication manufacturing sectors. The government aims to attract significant investments through various incentives and subsidies.
Subsidies on Power, Water, and Land Tariffs
To provide a competitive edge to potential investors, the Gujarat government plans to offer substantial subsidies on power, water, and land tariffs. These subsidies will significantly reduce the operational costs of setting up and running semiconductor manufacturing units within the state. By easing the financial burden on entrepreneurs, the government aims to attract both domestic and foreign investments.
Developing the Electronics System Design & Manufacturing (ESDM) Ecosystem
The ultimate goal of the Semiconductor Policy is to make Gujarat the pioneer in developing a comprehensive Electronics System Design & Manufacturing (ESDM) ecosystem. By fostering the entire value chain, from design to manufacturing, the state aims to create a self-sustaining industry that generates employment opportunities and contributes to technological advancements.
Guiding Investments from India Semiconductor Mission Policies
The Gujarat government aims to direct a significant portion of investments available under the India Semiconductor Mission policies towards the state. This approach seeks to leverage the resources and funds provided by the central government to bolster Gujarat’s semiconductor industry further. The synergy between state and central government efforts will accelerate the growth of the semiconductor sector in Gujarat.
Establishing a ‘Semicon City’
As part of its ambitious vision, the Gujarat government envisions creating a dedicated ‘Semicon City.’ This city will serve as a hub for semiconductor and display fabrication activities, hosting various industries and companies related to the semiconductor sector. By centralizing these activities, the state aims to foster collaboration, research, and innovation.
Capital Assistance and Subsidies
To incentivize investors and companies to participate actively in the semiconductor ecosystem, the Gujarat government has outlined several capital assistance and subsidy measures.
- Additional Capital Assistance: Projects approved under the India Semiconductor Mission will receive an additional 40% capital assistance of the central government’s capex assistance. This boost in funding will enable projects to scale up and accelerate their progress, further strengthening the semiconductor industry’s foundation in the state.
- Design-Linked Incentive Scheme Exclusion: While offering generous incentives, the policy ensures that projects approved under the Design-linked Incentive scheme of the Union government are not eligible for benefits under the new policy. This approach streamlines the distribution of incentives and ensures that all projects receive support equitably.
- Subsidies on Land Procurement: To facilitate the acquisition of land for semiconductor projects, the government is offering a 75% subsidy for procuring the first 200 acres of land in the Special Investment Region. Additionally, upstream or downstream projects can avail of a 50% subsidy on land cost, making it more affordable for businesses to establish operations in the state.
Semiconductors
Before delving into the semiconductor policy’s implications, it is essential to understand the significance of semiconductors in modern technology.
Semiconductors are materials with a conductivity level between conductors (e.g., metals) and insulators (e.g., ceramics). The most common semiconductor material is silicon, but other elements or compounds like germanium, gallium arsenide, or cadmium selenide can also exhibit semiconductor properties.
Semiconductors serve as the building blocks of modern electronics, enabling the creation of transistors, diodes, integrated circuits, and various other semiconductor devices. These devices form the backbone of electronic systems, from smartphones and computers to industrial machinery and communication networks.