The Indian government is reportedly planning to offer 1 billion ISD incentives to each semiconductor firm that sets up its manufacturing unit in the country. This is being considered Inder Prime Minister Narendra Modi’s ‘Make in India’ initiative.
India is the 2nd largest smartphone manufacturer after China. The only issue in India’s electronic manufacturing is the lack of local chip manufacturing. India, like most companies, imports chips from China and Taiwan. This is the reason the Indian government now wants chip makers to manufacture in India.
This is just being considered and the Indian government is now taking feedbacks from Industry experts before making any plans.
Most companies are now facing a global shortage of semiconductors. So, semiconductors companies are looking for adding more plans to meet the demand. The primary reason is the limited number of semiconductor companies but increasing demand. So Now with the EV vehicle push, demand for chips will increase. After the Galwan valley face-off, India is trying to get rid of China’s imports. This cannot be possible until India becomes self-dependent in semiconductor manufacturing.
Here it is important to note that Intel was interested in opening a semiconductor manufacturing plant in India back in 2007. But The Congress-led UPA government didn’t take any interest. After struggling in India, the company shifted to China and built a $2.5 billion, 300mm wafer fabrication plant in China.
At the current time, $1 billion isn’t a big help for a semiconductor company because it requires a big investment for starting a semiconductor plant. Most semiconductor companies have their R&D Centres in India. Consumption of semiconductors in India was about $21 billion in 2019 and is growing fast. So, companies can bet in India.
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