India readying for bigger role in semiconductor market

•The Covid-19 pandemic and subsequent global lockdowns forced the closure of crucial semi-conductor chip-making facilities in Japan, South Korea, China, and the US. This presents an opportunity for India to fill up these production gaps by setting up its own manufacturing facilities.
•The semiconductor industry forms an essential part of all electronic items. India, which is now rapidly promoting and developing its electronics manufacturing cluster, currently holds a 3% share of global electronics production. India is a hub for semiconductor research and design but it lacks behind in the production of the chips locally.
•As hub for semiconductor design India has nearly 2,000 chips being designed per year and more than 20,000 engineers are working in various aspects of chip design and verification.
•Taiwan and South Korea make up about 80% of the global foundry market. Foundries are facilities that manufacture chips that other companies design.
•The Indian semiconductor market was valued at USD 27.2 billion in 2021 and according to the India Electronics and Semiconductor Association, India’s semiconductor market is expected to more than double between 2021 to 2026 and reach US$ 64 billion.
•As there is almost no existence of semiconductor manufacturing companies in Indi, this leads to a huge import value of around $24 billion. The figure is estimated to reach around $100 billion shortly. India could have a large role to play in the semiconductor industry as the world’s fifth-largest economy looks to boost its domestic chip sector.
•Anil Agarwal’s Vedanta group has announced a Rs 1.54 lakh crore investment for setting up semiconductor and display manufacturing units in Gujarat along with Taiwanese contract manufacturer Foxconn, IGSS Ventures, and Abu Dhabi-based Next Orbit Venture’s ISMC. Vedanta and Elest Pvt Ltd proposed to build a display manufacturing unit.
•Israel-based International Semiconductor Consortium has plans to begin construction on India’s first semiconductor fabrication plant as soon as February 2023.
•The Tata Group intends to invest US$90 billion (about Rs7,452 billion) in the semiconductor industry across the group companies over the next five years. It plans to foray into advanced chip manufacturing, popularly known as fabs, in a few years.
•The government has tweaked the Rs 76,000 crore incentive scheme for semiconductors and display manufacturing units approved in December 2021 by the Ministry of Electronics and Information Technology (MeitY). The new policy offers 50% of the project cost across all categories of factories to woo global players.
•A Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) introduced on April 1, 2020 involves provision of financial incentive of 25% on capital expenditure for the identified list of electronic goods, including electronic components, semiconductor/ display fabrication units, ATMP units, and specialized sub-assemblies.
– Nivedita Mukherjee