India have huge potential with workforce and lately government also started focusing on manufacturing semiconductor chips in india.
As fossil fuels became the driving force to 1st INDUSTRIAL REVOLUTION similarly the Semiconductors will be the driving force for the 4th INDUSTRIAL REVOLUTION. We cannot even imagine our fast-moving life without the Semiconductors whether it’s the Country’s Economy or Our Daily Life.
Although there is another truth as well that India today depend on imports from other countries for the crucial semiconductors devices. Over it , China is a world leading supplier of semiconductors in the world and has emerged as a major rival to india in terms of semiconductors production.
If there is any disruption to the supply of semiconductor the it might be a great setback to India financially , economically and geo politically .
In this study we show you how India can deal with this problem and what should be the Government’s plan to tackle it. We will also see the cabinet approval of $ 10 billion PRODUCTION LINKED INCENTIVE SCHEME for semiconductors.
HOW INDIA CAN EMERGE AS A SEMICONDUCTOR SUPERPOWER IN THE COMING DECADES |||
# SEMICONDUCTORS SUPPLY CHAIN AND INDIA’S POSITION IN THIS IN THE WORLD…..
Semiconductors are also called the integrated circuits and micro chips
Designing needs investment in which USA is a dominant player. It requires a lot of investment and labourers for its heavy setups and USA, SOUTH KOREA, JAPAN , CHINA and TAIWAN are well expanded to everywhere in the world.
WHERE DOES INDIA STANDS ???
Till march 2021 India was 100 % dependent on imports, but India has an advantage over chip design and assembling. Many countries have established their design and assembly centers in india because India has a cheap and highly skilled labours.
India still has a very small role to play in the global production ratio while USA dominates more than 50% of the world’s total production. Most famous companies like NVIDIA, TEXAS instruments , BROADCOM and INTEL come from America are the 4 major leaders while SAMSUNG the 5th one is from South Korea.
This Global MNCs have a dominant role in production because semiconductors need a heavy investment. It is capital intensive because on daily basis there is some new change and inventions globally so a large amount of investments is needed in RESEARCH and PROJECTS.
It requires over $ 15-20 billion to just establish a research lab and India’s recent incentive funds is just of $ 10 billion.
RESEARCH, DEVELOPMENT & DESIGN |||
INDIA first needs to focus on core activities to reduce the cost of operation.
India should initially do the research and design activities like ELECTRIC DESIGN AUTOMATION (EDA) , CORE INTELLECTUAL PROPERTY (IP) and CHIP DESIGN .
We can support the existing chip-design experts , technology and innovation centres. We can establish the Technology centres in major Engineering Colleges from where we can get the critical and highly skilled labourers needed for this industry.
The government plans to support 85000 semiconductor engineers in the coming years.
NEW FABRICATION FACIILITIES AND FOUNDRIES |||
Fabrication facilities needs to be set up to developed advance chips. india should first focus on the low-end and medium chips which are less costly and involve low risks as compared to high chips which have a large investment failure due to heavy competitions from big companies.
These low and medium chips foundries can even be setup for less than $ 1 billion .one benefit of this is that the required expertise for these chips we can get easily in India and this help us to establish our own stage for these chips globally and will save our investment.
ATP (ASSEMBLY , TESTING & PACKAGING) |||
Today this segment shares 10% of the total chip manufacturing industry by value.
It is a labour intensive sector and china therefore is a world leader in this sector but now the cost of labour in China is increasing thus INDIA can become the next destination for ATP by utilising her Democratic dividend and Cheap Labour but Vietnam and Malaysia are a big challenge to india in attracting companies from China.
Thus India needs to give her population the required skills to grab the opportunity under SKILL INDIA MISSION and improve ease of doing business to attract the companies.
FOXCONN, WINSTRON AND SAMSUNG have started their companies in india and trend should be continued.
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