Athira Sethu
Kochi, 25 September 2024
India is investing heavily in semiconductor manufacturing to make the country self-sufficient in the critical technology space. It aims to become one of the large manufacturing hubs in the world.
During the COVID pandemic period, the world faced huge shortage of chips. This disrupted the manufacturing process of several electronics hardware like computer, laptops, automobiles, consumer electronics and many more. Many countries realised the importance of being self-sufficient in the chip design and manufacturing space owing to its geostrategic importance. And India is no exception.
The country’s heavy reliance on China due to huge import of electronic goods make it vulnerable to supply chain shocks. Subsequently, India announced a semiconductor mission under which the government committed to invest Rs 76,000 crore (around $10 billion) for creating a semicon ecosystem in the country.
Such measures have already started to pay dividends as many players have started the process of setting of fab plant in India. The most notable is the setting up of a new semiconductor unit by Micron Technology at Sanand, Gujarat with an investment of $2.75 billion.
Similarly, Tata Electronics is coming up with a mega semiconductor fabrication facility in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) at Dholera, Gujarat. This plant will see an investment of around $3.5 billion. Also, Tata Group is coming up with another fab unit at Morigaon, Assam.
CG Power is another company that will come up with a fab unit at Sanand, Gujarat in partnership with Renesas Electronics Corp of Japan, and Stars Microelectronics of Thailand.
Recently, Kaynes Semicon has received the approval to set up such a unit at Sanand in Gujarat at an investment of Rs 3,300 crore.
The implications of these investments are significant. Firstly, thriving domestic semiconductor industries would be imperative for technological self-sufficiency. India imports practically the entire requirement of semiconductors, leaving itself vulnerable in the face of disruptions at the global supply chain. A domestic manufacturing presence would help reduce dependence on imports and enhance national security.
Moreover, a strong semiconductor infrastructure will support next-generation technologies such as artificial intelligence, 5G, or electric vehicles.
Another key advantage is job creation. Thousands of direct and indirect employment opportunities are expected to be created with semiconductor plant development, especially in engineering and manufacturing sectors.
