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Fab-ulous India: Why it's time New Delhi gets cracking on making chips

India is the world’s second-biggest cellphone manufacturer but still relies on imports for semiconductors that power these phones, laptops, cars, televisions and other consumer goods. As an acute shortage of chips hobbles the world, there is no better time than now to have a chip-making facility at home.

April 26, 2021 / 05:03 PM IST
From cars to toys, chips power almost all electronic devices and their shortage will be felt across sectors.

From cars to toys, chips power almost all electronic devices and their shortage will be felt across sectors.

Car factories are idle, phone manufacturers are worried and laptop makers are scrambling, unsuccessfully, to meet the orders. The world is facing an unprecedented shortage of semiconductors that power toys, gaming consoles, televisions, cars and more due to a COVID-fuelled demand spike.

Alarm bells are ringing-from from the United States to India—the world’s biggest chipmakers have warned that the shortage will extend into 2022. To ramp up capacity, chip-makers are pumping in record sums for money to meet the surge in demand.

The Indian government, too, is reportedly working on a plan to encourage domestic production of semiconductors. According to a report, the government intends to offer more than $1 billion (about Rs 7,400 crore) in cash to every company that sets up a manufacturing unit in the country. That may sound like huge money to offer to one company but semiconductors don’t come cheap and India, which depends on imports, needs its own capabilities if it wants to be self-reliant.

Demand is booming in India