India's First Chip Factories Ready, AI Data Centers Get 20-Year Tax Holiday

• India's first chip manufacturing projects under Semicon 1 are set to begin commercial production in weeks/months, according to MeitY Secretary S Krishnan.
• The Union Budget announced a 20-year tax holiday for AI data centers, aiming to position India as a global hub for data infrastructure.
• Semicon 1 has approved 10 semiconductor units, including a CMOS silicon fab, a compound semiconductor fab, and eight packaging units.
• Semicon 2 will focus on expanding the entire semiconductor ecosystem, including advanced packaging, equipment manufacturing, materials supply chains, and a revamped DLI scheme for chip design.
• The tax holiday for AI data centers is based on the principle of not taxing export-oriented businesses, similar to the STPI framework that boosted software exports.

Why It Matters: India is advancing its semiconductor manufacturing with new fabs and incentivizing AI data centers for global tech leadership.