Odisha Announces Extra 25% Capex Support for ISM-Approved Semiconductor Projects Under Semicon 2.0

Odisha has announced an additional 25% fiscal support on eligible capital expenditure for semiconductor projects approved under the India Semiconductor Mission. The support will also extend to companies making semiconductor equipment, specialised chemicals, gases and materials. 

The announcement comes as the state tries to bring more parts of the semiconductor supply chain into Odisha. Alongside the new incentive, the government is working on a proposed semiconductor hub near Cuttack and is in talks with companies from several countries. 

Support Extends Beyond Chip Manufacturing 

The new support is aimed at businesses operating in areas around semiconductor manufacturing, including equipment and materials used by the industry. The state has linked the measure to India's Semicon 2.0 programme, which has a ₹1,27,500 crore outlay. 

Chief Minister Mohan Charan Majhi said Odisha was among the early states to align its semiconductor policy with Semicon 2.0. The additional support is available for eligible capital expenditure under ISM-approved projects. 

870 Acres Set Aside Near Cuttack 

Odisha has identified 870 acres at Naraj, between Cuttack and Bhubaneswar, for its proposed Odisha Silicon Valley. The planned site is intended to bring semiconductor, electronics and IT projects into one cluster. 

Majhi said the state is currently engaging with around 10-12 companies from countries including Japan and Sweden. Five semiconductor projects are already under construction in Odisha, while discussions are continuing on three more. 

₹4.7 Billion Investment Pipeline 

Odisha's semiconductor investment pipeline is around $4.7 billion, of which $1.2 billion has already been committed. Another $3.5 billion is listed as an upcoming investment. 

The state has separately approved five semiconductor projects worth around ₹11,000 crore. These projects are expected to create about 4,500 direct and more than 16,000 indirect jobs. 

Several Projects Are Still Being Worked Out 

The state is also discussing an investment involving Intel-3DGS, with a proposed outlay of around $3.3 billion for advanced glass substrate and packaging.  

SiCSem is exploring a Phase-II expansion covering silicon carbide and gallium nitride manufacturing and packaging. 

Read More: Semicon 2.0 Guidelines Restrict Sale of Chip Plant Assets Before Commercial Production! 

Conclusion 

The additional 25% capex support gives semiconductor companies another incentive to consider projects in Odisha. The state is pairing the policy measure with the proposed Naraj cluster and a pipeline of projects covering manufacturing, packaging and other parts of the semiconductor supply chain. 

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