Odisha to get Rs 3,406-cr silicon carbide semiconductor project
The Unit Approval Committee (UAC) of the Falta Special Economic Zone approved a silicon carbide (SiC) semiconductor manufacturing facility to be set up in Odisha by a Tamil Nadu-based company, with a total investment of Rs 3,406.25 crore.
The facility will come up at IDCO Infovalley-II in Khordha district, Odisha, and will manufacture SiC diodes and SiC MOSFETs — power semiconductor devices used in electric vehicles, renewable energy systems, and industrial power electronics.
The project is being co-funded through a Central government capital subsidy of Rs 700 crore, an Odisha state government subsidy of Rs 350 crore, and the remaining Rs 1,956.25 crore from the promoter.
Projected annual capacity is 4.8 million SiC diodes and 91.2 million SiC MOSFETs, with an expected export turnover of about Rs 7,043 crore and net foreign exchange earnings of roughly Rs 4,523 crore over the following five years.
India Semiconductor Mission (ISM) and Compound Semiconductor Incentives
The Odisha project is a compound-semiconductor unit approved under India's broader semiconductor incentive architecture, making the ISM's specific compound-semiconductor support tier directly relevant.
Key Details
- The India Semiconductor Mission was approved by the Union Cabinet on 15 December 2021 with an outlay of Rs 76,000 crore, aimed at building a complete semiconductor and display manufacturing ecosystem in India.
- Under the Modified Scheme (introduced September 2022), the Centre extends fiscal support of up to 50% of project cost for semiconductor and display fabs, and 30% of capital expenditure for compound semiconductor, silicon photonics, and semiconductor packaging units.
- India Semiconductor Mission 2.0, announced in 2026, carries a further outlay of about Rs 1.27 lakh crore to expand fabs, advanced packaging, and the broader ecosystem.
- The combined Central and Odisha state subsidy for the SiCSem project (Rs 700 crore + Rs 350 crore = Rs 1,050 crore) is approximately 31% of the total project cost, consistent with the compound-semiconductor support tier under the ISM framework.
This project illustrates the ISM's compound-semiconductor incentive tier in operation — distinct from the higher, 50%-support tier reserved for full silicon wafer fabs — and shows the incentive architecture attracting investment outside the traditional semiconductor hub states.
Special Economic Zones (SEZ) Framework and the Falta SEZ Approval Route
The project was cleared not by the ISM authority directly but by the Unit Approval Committee of an SEZ, making the SEZ approval mechanism itself a testable static concept.
Key Details
- The Special Economic Zones Act, 2005, provides the legal framework for setting up SEZs in India, with each zone administered by a Development Commissioner and a Unit Approval Committee that clears individual investment units within the zone.
- Falta SEZ, located near Kolkata in West Bengal, was originally established as an Export Processing Zone in the early 1980s and was converted into an SEZ under the SEZ Act with effect from February 2006.
- SEZs offer units fiscal incentives (such as duty-free import of capital goods and input materials) and simplified compliance, in addition to any separate Central or state manufacturing subsidy such as the ISM incentive.
- A unit's physical location in one state (Odisha) being administratively cleared through an SEZ headquartered in another state (West Bengal) reflects how SEZ jurisdiction and UAC approval authority can extend beyond the SEZ's own geographic footprint for certain categories of approvals.
The Falta SEZ's Unit Approval Committee — not a state industry department — is the approving authority named in this news, making the SEZ approval process (rather than just the subsidy scheme) part of the testable static framework behind the announcement.
Silicon Carbide (SiC): Wide-Bandgap Semiconductors and Strategic Applications
SiC is a "wide-bandgap" compound semiconductor, a technology category distinct from conventional silicon chips, and increasingly important for India's electric mobility and renewable energy goals.
Key Details
- Silicon carbide has a bandgap roughly three times that of conventional silicon, giving it higher voltage tolerance, greater thermal conductivity, and higher switching efficiency — properties suited to high-power applications.
- Key applications include traction inverters and on-board chargers in electric vehicles, DC-DC converters, solar inverters, and other power-electronics systems where energy efficiency at high voltage matters.
- SiC devices (diodes and MOSFETs, the two device types in this project) are used specifically for power conversion and switching, as opposed to logic or memory chips, which are typically made on standard silicon.
- The global SiC device market has been estimated to grow roughly six-fold between 2021 and 2027, reflecting rising demand from EV and renewable-energy value chains — a demand context relevant to why India is incentivising domestic SiC capacity.
By producing SiC diodes and MOSFETs domestically, the Odisha facility targets a component category central to India's electric-vehicle and renewable-energy manufacturing ambitions, reducing import dependence on power semiconductors that are currently sourced mostly from a handful of global suppliers.
- Total project investment: Rs 3,406.25 crore, approved by the Unit Approval Committee of Falta SEZ.
- Location: IDCO Infovalley-II, Khordha district, Odisha.
- Funding split: Central subsidy Rs 700 crore; Odisha state subsidy Rs 350 crore; promoter contribution Rs 1,956.25 crore.
- Projected annual output: 4.8 million SiC diodes and 91.2 million SiC MOSFETs.
- Projected five-year export turnover: approximately Rs 7,043 crore; net forex earnings: approximately Rs 4,523 crore.
- India Semiconductor Mission: approved 15 December 2021, outlay Rs 76,000 crore; compound-semiconductor support tier: 30% of capex.
- Falta SEZ: originally set up in the early 1980s; brought under the SEZ Act, 2005 framework effective February 2006.