Editorial: Red carpet for chipmakers
A massive opportunity beckons India in the semiconductor industry as the pandemic-hit world has been reeling under an acute shortage of chips with an all-pervading impact across sectors like automobiles, smartphones, laptops, tablets, consumer durables, gaming consoles and other electronic products. Promoting semiconductor fabs through a set of attractive incentives has become a geopolitical priority […]
A massive opportunity beckons India in the semiconductor industry as the pandemic-hit world has been reeling under an acute shortage of chips with an all-pervading impact across sectors like automobiles, smartphones, laptops, tablets, consumer durables, gaming consoles and other electronic products. Promoting semiconductor fabs through a set of attractive incentives has become a geopolitical priority now. India’s decision to roll out a $10-billion red carpet to woo chip makers is a welcome move that will go a long way in helping the country emerge as an electronics manufacturing hub and reduce dependence on supplies from China. Though India traditionally had a strong base for the semiconductor design industry, hardware manufacturing has remained elusive. Over the last 15 years, several consortiums made multiple attempts at chip making but things never worked out. Taiwan and China continue to dominate the global semiconductor market. Made of silicon, chips are tiny objects that perform a host of functions such as powering displays and transferring data. Integrated circuits, microchips, transistors and electronic sensors are built with semiconductor materials. They enable key functions such as high-end computing, operation control, data processing, storage and input and output management. As part of the $10-billion plan approved by the Centre recently to establish chip and display industries in the country, the production-linked incentives (PLI) will be offered to companies over six years. By this initiative, India seeks to reshape supply chains to cut its reliance on China amid a global chip shortage that has impacted the production of goods ranging from cars to computers.
The incentive plan will hopefully facilitate the production of critical components used in automobiles and mobile phones locally. In addition, incentives provided under the scheme are expected to help design, fabricate, pack and test the semiconductor chips and develop a complete ecosystem. In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure. The red carpet rolled out by India would not only help the country become self-sufficient but also a global supplier of chip at a time when the demand-supply gap is widening by the day, disrupting the supply chain and increasing the overall manufacturing costs. Under the incentive scheme, the government will extend financial support of up to 50% of the project cost to firms selected to set up semiconductor and display fabs in India. It will also work closely with the States to establish high-tech clusters with requisite infrastructure such as land, semiconductor-grade water, high-quality power, logistics and research ecosystem to house the fabs. Support will also be provided to 100 local companies engaged in semiconductor design for integrated circuits, chipsets, system on chips, systems and IP cores and semiconductor-linked design. Any country that does not learn to make semiconductors will lag behind others in the days to come.
