India is expecting at least a dozen semiconductor manufacturers to set up local factories in the next 2-3 years after the South Asian nation offered lucrative incentives for the sector, as per the Information & Technology minister of the country.
Prime Minister Narendra Modi’s government is actively working to develop an entire ecosystem for the chip manufacturing industry and will begin taking applications under the incentive-based schemes from January 1, 2022. Ashwini Vaishnaw, who also holds the railways and telecom portfolio, said in an interview with Bloomberg Television’ Haslinda Amim and Rishaad Salamat.
“The response has been very good. All the big players are in talks with Indian partners and many want to come directly to set up their units here. Almost all big ones are talking to us,” Vaishnaw said.
Last week, the Modi government approved sops amounting to 76,000 crore INR or $10 billion spread over a period of 6 years to boost local chip production, a move which in all likelihood will aid the South Asian nation to reduce its reliance on expensive imports of the material used in everything from mobiles to EVs amidst a global shortage.
Presently, India relies on overseas manufacturers for almost all of its semiconductor requirements. The government has already notified the plan and it expects compound semiconductor units and design and packaging companies to get approval within the next 3-4 months, Vaishnaw said.
“In the next 2-3 years time frame, we see at least 10-12 semiconductors going into production, we see display fab going into production or maybe finalizing completion. At least 50-60 designing companies would have started designing the products in the next 2-3 years”.
On the proposed 5G auctions, Vaishnaw said the telecom regulator is holding consultation with industry players and is likely to submit its recommendations by March next year and the spectrum pricing is expected to be “reasonable”.
The government aims to begin 5G services by October-December of 2022. This is a good move as the global chip shortage has exposed the dependence of the world on a few players who hold the monopoly in terms of chip production. With India beginning its own chip manufacturing, we could witness the prices of locally manufactured phones to take a dip and this could also bring down the prices of EVs.
Also read:
