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Developing a semiconductor industry is a marathon, but India is prepared: IT Minister Ashwini Vaishnaw

Addressing the Semicon India Conference virtually, Prime Minister Narendra Modi touted India as an attractive investment destination for semiconductor technologies due to the growing adoption of digital services and digital infrastructure across the country.

Bengaluru / April 29, 2022 / 05:23 PM IST
[Representative image: Shutterstock]

[Representative image: Shutterstock]

India understands that building a semiconductor industry is not a sprint but a marathon and is prepared for the perseverance required to build it, said Minister of Railways, Communications and Electronics & Information Technology Ashwini Vaishnaw, while addressing the inaugural session of the Semicon India Conference 2022, on April 29.

"We have prepared for a very sincere partnership between industry, government academia, and research, which is really required for the sustained development of the semiconductor industry in India. That's why we are committed to the long-term development path," Vaishnaw said.

India is already home to 20 percent of the world's very large-scale integration (VLSI) chip design engineers and 250 semiconductor design companies are working out of the country. The minister noted that talent will be a key differentiator that will work in India's favour.

"We understand that many countries are offering incentives. We also offer very substantial financial incentives, but when I've spoken to many of the CEOs of global majors, the big differentiator that has come out is that we have committed to create and augment our talent pool by 85,000 semiconductor professionals over the next 10 years," the minister said.

"Almost 100 academic institutions and R&D organisations have been roped in to train 5,000 professionals in research, 30,000 engineers in BTech and MTech, and 50,000 at floor level. So, this is a very big commitment to augment our talent nation status," he added.

Chip shortage impact

The three-day event in Bengaluru comes after two years of a global acute semiconductor shortage, triggered by the global lockdowns during the pandemic and subsequent supply chain disruptions. The shortage has had a massive impact on electronics manufacturing, but mainly hampered the growth of the auto industry. In fact, Intel CEO Pat Gelsinger said on April 28 that the chip shortage, which cost the American economy about $240 billion in 2021, will persist till 2024.

Minister of State for Electronics, IT, Skilling, and Entrepreneurship Rajeev Chandrasekhar recently told Moneycontrol in an interview that the $1.5 trillion global electronics value chain is currently dominated by China to a large extent. However, the world is looking for diversification in the post-COVID scenario, thereby providing an opportunity for India to become a trusted supply chain for the rest of the world.

India aims to be one of the global leaders in the semiconductors and electronics space and has chalked out an ambitious plan to do about $300 billion of manufacturing by 2025, of which $120 billion will be exports and about $70-80 billion will be consumed by domestic companies. To facilitate this, the country is now courting global semiconductor firms to make investments in India. Chandrasekhar recently told Moneycontrol that he is personally making presentations to these major semiconductor companies.

Last year, the government had approved a Rs 76,000-crore scheme with incentives lined up for companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensor fabs, semiconductor packaging and semiconductor design.

PM promises support

Speaking virtually at the conference, Prime Minister Narendra Modi touted India as an attractive investment destination for semiconductor technologies, due to the growing adoption of digital services and digital infrastructure in the country.

"We are aware that for a semiconductor ecosystem to flourish it is necessary to ensure adequate support from the government. Allow me to put our approach in the language of semiconductors itself. In earlier times, industries were ready to do the work but the government was like a 'NOT Gate'. When any input flows into the NOT Gate, it gets negated. We understand that the government must be like the 'AND Gate'. While the industry works hard, the government must work even harder," the prime minister said.

He further noted: "We have undertaken wide-ranging reform for improving ease of doing business in India. Last year, we abolished more than 25 of our compliances and gave auto-renewal of licenses. Similarly, digitisation is also bringing speed and transparency to the regulatory framework,"

Minister Vaishnaw also noted that the government has taken feedback shared by the industry "very seriously, especially the feedback about developing the supply chain of elements, like critical gases, special chemicals"

At the conference, Chandrasekhar also said India's approach to catalyse the semiconductor ecosystem and seek out its growth is a very calibrated strategic roadmap in transforming the digital economy into a trillion-dollar digital economy by 2025-26.

"The techade in India is being driven, built, catalysed, energised by thousands of startups around the country. And it is this ecosystem (of) innovation that needs to be connected to the semiconductor space and vice versa, to shape the future of the semiconductor ecosystem for the world," he added.

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