Why India wants semiconductor manufacturing
Semiconductors are an important part of India’s manufacturing ambitions for the next five years. The government has made no secret of the fact that it wants to attract semiconductor companies to India. Mint explains why:
Why does India need to make chips?
Chips are an integral part of pretty much all electronic products, so making them here will massively improve the country’s net value addition to the overall electronics manufacturing process. This year’s production linked incentive (PLI) schemes will help drive scale of manufacturing, but the industry still imports many components. India aims to increase value addition to 35-40% by 2025. In addition, semiconductor manufacturing also has strategic advantages, as countries don’t want to depend on their imports for essential infrastructure like defence and power.
Which chips will be manufactured in India?
Industry experts say India won’t be going after high-tech semiconductors used in smartphones. Instead, it will target the assembly, test, marking and packaging (ATMP) businesses and companies that make chips for automobiles, medical devices, etc. ATMP majors have reportedly had discussions with the government as well. The government also invited expressions of interest for semiconductor fabs of 28nm or lower node size last year. The node size is a manufacturing process that is influential in the performance and efficiency of semiconductors.
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What are India’s plans for chip manufacturing?
The government hasn’t revealed its plans yet, though a Reuters report from last month said it is offering $1 billion to each semiconductor company that sets up business in India. In May, Ajay Prakash Sawhney, secretary, ministry of electronics and information technology, said the government will announce “concrete schemes” in six months.
