Karnataka, the state which houses the silicon valley of India, is all set to get 3 billion dollars in investment from International Semiconductor Consortium (ISMC). ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor. U.S. chip giant Intel Corp has announced plans to acquire Tower. So, basically, the original pioneer of semiconductor industry is all set to invest in a semiconductor manufacturing plant in India.
“Karnataka is already a pioneer in the IT, BT and R&D sectors. The MoU with ISMC would make Karnataka the place to look forward to in semiconductor technology,” Bommai said in his address after the agreement was signed.
“The Union government under the able leadership of Prime Minister Narendra Modi has launched the Semiconductor Mission and it has spurred Karnataka to lead the march in this sector,” he added.
After decades of failure to have an indigenous semiconductor industry, India is finally making all possible efforts to have a thriving semiconductor ecosystem. Semicon India Programme with a production linked incentive of 10 billion dollars has been launched and the country is organizing conferences and seminars to boost activity around semiconductors.
As per a press release by the MEITY last month, the government received an excellent response on its semiconductor PLI scheme. The companies that are willing to invest include Vedanta Foxconn JV, IGSS Ventures, ISMC for semiconductor fabs, while 2 companies viz., Vedanta and Elest have submitted applications for Display Fabs.
India has so far only one semiconductor manufacturing plant at Chandigarh, that too government-run and very inefficient. The country imports semiconductors worth more than 15 billion dollars every year from countries like China, Taiwan, South Korea, and the United States.
India, despite being a low-wage and high skilled country, could not have a semiconductor foundry because the government of the country was not willing to spend money on manufacturing plants. Countries around the world succeeded in semiconductor manufacturing only with active government support, but in India, 10 billion dollars was too expensive for the government to get a semiconductor plant.
The previous three attempts (2007, 2013, and 2017) failed in setting up a semiconductor manufacturing plant in India because incentives were too little for the companies. The country recognized the importance of the semiconductor industry with the ongoing chip shortage which put many industries including automobiles on a halt.
If the country succeeds in getting semiconductor manufacturing plants in this attempt, the name of the Modi government will go down in history given the huge importance of the industry, which will only increase in the coming decades. The name of Prime Minister Modi will be written in golden words by future generations of India’s electronics sector entrepreneurs for successfully getting a chip manufacturing plant in India if the plan succeeds.
The global semiconductor industry is valued at around 481 billion dollars as of 2018 and is dominated by companies from South Korea, Taiwan, and Japan, all of which happen to be India’s friends. However, it is important to become AtmaNirbhar in every strategic area amid ongoing global instability.
The Indian capitalism of the 21st century must be led by Indian companies, not western MNCs. Indian companies must become global leaders in critical areas, and our capitalism must put nation-first, not the consumerist capitalism of Europe. The indigenous capitalism developed under Modi government will make India the Vishwa Guru that it used to be for thousands of years.
