Strict guidelines under Semicon 2.0 aim to prevent early asset liquidation and ensure long-term promoter commitment.
The Indian government has issued strict operational guidelines under its newly notified Semicon 2.0 scheme, prohibiting approved semiconductor companies from selling, disposing of, or mortgaging project assets before full commercial production commences.
Under the framework—which carries a total incentive outlay of $15.2 billion (1.27 lakh crore rupees)- beneficiary firms are barred from creating any charge, lien, or hypothecation on project infrastructure without prior written approval from the designated nodal agency. To ensure operational continuity, recipient companies must also commit to remaining in commercial production for a minimum of three years following full project commissioning.
The government has published specific regulations covering three key operational pillars: equipment and materials manufacturing, semiconductor fabrication facilities, and assembly, testing, marking, and packaging (ATMP/OSAT) operations. Under the equipment and materials stream, businesses can also access production-linked incentive (PLI) benefits by sourcing components and sub-assemblies domestically.
To enforce corporate accountability, lead promoters must maintain at least 51 per cent equity shareholding with matching voting rights throughout the support agreement term and the mandatory three-year operational period. Controlling entities must be declared at the application stage, with any subsequent shareholding adjustments subject to mandatory reporting.
The guidelines also restrict what qualifies for government subsidy, explicitly excluding expenditure incurred on land acquisition, land development, site offices, temporary facilities, technology transfer costs, interest during construction, and research and development from capital expenditure calculations.
