Mumbai: The government expects to attract an investment of Rs24,000 crore in semiconductor manufacturing units the next three years. The government would provide capital subsidy for the investors setting up chip manufacturing units in India under the semiconductor policy announced today.

The subsidy will be in the form of tax breaks and interest-free loans. The incentives will be 20 per cent of the capital expenditure during the first 10 years, but the companies have to invest a minimum Rs2,500 crore. Such units will have to be set up in special economic zones (SEZs) to avail of this benefit.

The country is likely to have two or three fabrication units, involving investment of $2-3 billion each by 2010, IT and communications minister Dayanidhi Maran said.

"An appraisal committee to be headed by additional secretary in the department of IT will be formed very soon. The committee will receive expression of interest from interested parties and will submit its recommendations to the government," the minister said.
Maran said he will now reopen negotiations with Intel and other companies to explore possibilities of them setting up units in the country.

Intel, the world's largest chip manufacturer, had been waiting for the semiconductor policy to take decisions on its India plans and had in the meantime selected Vietnam for a facility.