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.
“The policy will favour Made-in-India chips to support fabrication in India. We see no reason to allow semiconductor imports once India begins production. We will strive to meet local demand from domestic production,” a government official said on the eve of SEMICON India 2022, a three-day global semiconductor conference organised by the Ministry of Electronics and Information Technology (MEITY), in Bengaluru.
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.
Prime Minister Modi himself attended the Semicon conference and said there was a collective aim to establish India as one of the key partners in global semiconductor supply chains. “We want to work in this direction based on the principle of hi-tech, high quality, and high reliability,” he said, adding that “semiconductors are playing a critical role in the world in more ways than we can imagine”.
“We are using digital technology to transform lives in all sectors of governance from health and welfare to inclusion and empowerment,” said Modi.
Semiconductors are a strategic asset and manufacturing semiconductors is a tedious as well as an arduous process. It takes months and the government of India can no longer afford to wait for such a long duration if it wants to realise the $5 trillion economy dream by 2025. Thus, Prime Minister Narendra Modi is aggressively batting for bringing Semiconductor manufacturing into the country.
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 letters by future generations of India’s electronics sector entrepreneurs for successfully getting and 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.
