The Tamil Government also negotiates with the national and international semiconductor FABS to obtain increased rates for the production of chips designed by local companies. | Photo Credit: Getty Images/Istock
Tamil Nadu, built in his position of a pioneer in Indian electronics and semiconductor landscape, sanctioned the scheme of promotion of a semiconductor design as part of his mission Tomil Nadu 2030 (TNSM 2030). The scheme that was announced in the Tamil Nadu budget 2025 focuses on turbocharging the ecosystem without Fablass by offering targeted subsidies and prototype grants and placing the state as the future nerve center of innovation Chip.
According to the Government Order, financial incentives and support will be facilitated to Tamil Nadu entities involved in semiconductor design for integrated circuits (ICS), chipsets, chips (SOC), IP cores and Sémonduktor. For example, for companies whose products are commercially deployed, subsidies for wages will be offered for Tamil Nadu residents. It will be 30% in the early year, 25% in the second year and 20% in the third year. This subsidy will be limited to 20,000 GBP per employee per month.
Subsidy subsidy
Companies whose products must still be commercially deployed will be provided with subsidy subsidies for 50% of wages (basic wages) of employees for three years, subject to the ceiling of 5 GBP Crore per company. The company should prove the technical viability of the proposed product for the expert committee.
The government also negotiates with the national and international semiconductor FABS to obtain moderate rates for the production of chips designed by local companies. The government will promote the use of semiconductor products proposed by Tamil Nadu in a public contract within the transparency of Tamil Nadu in the Act on Tender.
The Minister of Industry TRB Rajaa said: “We are not involved in the main semiconductor investments that are dragged to other countries, despite our unrivaled talent and mature electronics with global players.
Infra support
The state also bet on the establishment of the Excellence Center (Coes) to provide the infrastructure needed for designing, testing and verifying chips. Tamilnadu Industrial Development Corporation Limited (Tidco) will support these centers attraction of the investment of the private sector under commercial conditions. It will be a “profitable” company (a special purpose vehicle) established as a joint venture between a private player or a partner of the academic institution and Tidco. And Tidco will be allowed to offer up to 40% of the project costs as awarding SPV, not exceeding 75 crore for the project. The government will replace the grant.
According to the government order, Tidco can be awarded 20% in each of the financial assisted SPV regardless of the quantum of the grant. And the Tidco Council was entitled to dilute the share of 5% to adapt future investors to the project.
The government will facilitate training 1,000 students from engineering universities in the State under the Indian workforce development program (ISWDP).
TNSM focuses on four main aspects – promotion of Fabbleless companies that carry out design, testing and packaging in the state; support for the production of semiconductor machines; Support for research and innovation in semiconductor sector; and creating a qualified workforce for the global and domestic semiconductor industry.
Published – 17th August 2025 21:32
