Semiconductor: India’s first ever chip manufacturing plant to be announced in few weeks

Union minister Ashwini Vaishnaw said on Tuesday that India’s first semiconductor fabrication unit will be announced in the coming weeks, as he expressed confidence that the country will soon join the league of a select few countries with a thriving semiconductor industry.

“We are almost at an inflection point when the first fab should be declared in a few weeks. And that is just the beginning,” Vaishnaw said at the Confederation of Indian Industry’s (CII) Partnership Summit.

“India is slated to become a vibrant semiconductor industry in the coming 3-4 years,” the Union minister for electronics and information technology (IT) said at the event. The government announced a $10 billion incentive package in December 2021 to encourage chip manufacturing in India.

The Centre is in discussions with at least four global semiconductor companies about establishing such units.

A semiconductor fab is a manufacturing facility that converts raw silicon wafers into integrated circuits. At a time when major economies have rolled out massive subsidies for the industry, India is competing with the United States, South Korea, and European nations to attract global companies.

Domestic semiconductor manufacturing became a government priority in the face of a chip shortage, which had serious consequences such as supply disruption in automobiles and electronics, particularly after the outbreak of Covid-19.

Last week, the US and India signed a Memorandum of Understanding (MoU) to establish a semiconductor supply chain and innovation partnership, emphasising the importance of chips in the global economy. The minister also emphasised the government’s success in transforming the country from an importer to an exporter of mobile phones.

“Today, 99 percent of mobile phones used here are made in India, which is in stark contrast to the situation 10 years ago when out of 100 phones, as much as 99 per cent were imported. The world today is dominated by a few telecom technology players and that is a barrier in many ways. That is why we decided to build our own end-to-end telecom stack,” he said, adding that it was recently tested for 10 million simultaneous calls in December.

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