CHENNAI: The state government has delinked its semiconductor incentives from the centre’s approval, offering chipmakers a fixed set of state subsidies they can negotiate against even if their projects are not selected under the union government’s `1,27,500 crore Semicon 2.0 programme, under the Tamil Nadu Semiconductor Ecosystem Scheme.
Notified on October 6 and launched on October 15 by Chief Minister C Joseph Vijay, the scheme allows the state to support projects that do not receive central assistance. Under the earlier policy, the capital subsidy for semiconductor manufacturing was linked to the assistance provided by the centre, according to the G.O. accessed by TNIE.
The scheme has two tracks. The first provides additional state incentives to projects approved by the centre. The investment promotion subsidy ranges from 15% to 25% of eligible capital expenditure approved by the centre, depending on the project category. Projects involving 300-mm silicon semiconductor wafer fabrication and advanced packaging are eligible for 25% state support, while legacy packaging projects receive 20%.
Semiconductor-grade raw materials, testing and characterisation facilities, research and development facilities for semiconductor equipment, and the manufacture, assembly or refurbishment of semiconductor equipment and components are eligible for 15% state support, subject to the scheme’s conditions.
The second track covers projects that have not applied for assistance under Semicon 2.0 or have applied but were not selected. These projects can receive fixed capital subsidies ranging from 15% to 25% of eligible fixed assets, as well as turnover-based subsidies of up to 2% annually for five years, depending on the category.
Minimum investment requirements range from `50 crore for certain semiconductor materials and packaging-related products to `500 crore for advanced packaging projects. Investors must choose one track for each project.
Proposals must reach Guidance Tamil Nadu, the state’s investment promotion agency, by September 30, 2027, according to official sources.
At least 50% of a project’s direct workforce must comprise TN residents. Separate incentives for chip design, research and development, and talent development may be notified later, sources added.