The government will implement a massive multi-billion dollar capital support and production-linked incentive plan to encourage semiconductor production in India. According to reliable sources, the move comes when various industries face drastic reductions in output due to a global chip shortage. According to industry estimates, the country’s semiconductor demand is expected to rise from $24 billion today to $l00 billion by 2025. Previous attempts to persuade businesses to make investments in the area have been doomed to failure. The government anticipates that by 2025, domestic production of electronics will have increased to between $350- and $400 billion.
Key Highlight:
- The government will implement a massive multi-billion dollar capital support and production-linked incentive plan to encourage semiconductor production in India.
- The move comes when various industries face drastic reductions in output due to a global chip shortage.
- According to industry estimates, the country’s semiconductor demand is expected to rise from $24 billion today to $l00 billion by 2025.
- Previous attempts to persuade businesses to make investments in the area have been doomed to failure.
- The government anticipates that by 2025, domestic production of electronics will have increased to between $350- and $400 billion.
A major multi-billion dollar capital support and incentive plan for semiconductor manufacturing in India are being prepared by the country’s government at a time when industries across sectors are being forced to cut production due to a global chip shortage, according to authoritative sources.
TSMC, Intel, AMD, Fujitsu, and United Microelectronics Corp. are among the semiconductor companies senior government officials are in active discussion as the government ramps up efforts to attract much-needed investment in the sector.
The government recently held a high-level meeting with telecom and IT minister Ashwini Vaishnaw principal scientific adviser K Vijay Raghavan, top scientist and Niti Aayog member VK Saraswat, Minister of State for IT Rajeev Chandrasekhar, representatives from the electronics IT and telecom ministries, Defence Research and Development Organization (DRD0), surface transportation and space departments and academia on the subject.”
Various ministries and departments responsible for industries affected by the semiconductor shortage will send representatives, “an insider claimed, citing sources:
Financial assistance for capital expenditures, tariff reductions on specific components, and benefits from programs such as the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and production-linked incentives could all be on the table (PLI). For companies considering India, every effort will be made to develop an enticing and investment-friendly plan.
There is a large gap between the current $24 billion in annual semiconductor imports from India and the estimated $l00 billion in demand by 2025. Previous attempts have failed to persuade companies to invest in the semiconductor space, especially because the sophisticated manufacturing processes necessitate large investments in addition to the requirement for a continuous supply of clean water and electricity.
Despite India’s reputation as a leader in chip design, the country has been unable to attract the much-anticipated fab manufacturing industry, which requires investments between $5 billion and $10 billion. Corona pandemic outbreak in early 2020 and many global companies’ strategy of looking to China and their procurement policy will likely help them get investments in India.
India’s government is confident that a large and rapidly growing electronics market will encourage companies to invest in the country, in addition to the needs of other industries such as defense, automobiles, space, and new-age technologies like SG and the internet of things (lOT).”
Because of this, there will be a lot of demand from within the country. Domestic electronics production is expected to reach $350-400 billion by 2025, from an estimated $75 billion currently. It’ll be a huge help in attracting investors, in my opinion..”
Mr PMO target semiconductor industry also it is massive ~350 billion market, we can try to develop infrastructure. https://t.co/Xg75ap0vGf
— Ashvini Sharma (@ashvini24x7) November 9, 2015
