This is not the first time that the government of India has shared ambitious plans to setup chip fabrication units. The authorities, around 2013-14, had announced that India was getting ready to house two chip manufacturing plants with more than $5 billion in investments
The government of India is ready to offer more than $1 billion in cash to chip companies that are ready to set shop in the country. A report by Reuters claims that for each chip fabrication plant that companies setup in India, the government will offer cash incentives amounting to more than $1 billion.
Reuters quoted two government official saying, “We’re assuring them that the government will be a buyer and there will also be mandates in the private market (for companies to buy locally made chips).”
However, the government is yet to finalise on how these incentives would be provided to companies setting up fabrication units in India. The country, at the moment, does not have any private chip fabrication unit.
Not the first time
This is not the first time that the government of India has shared ambitious plans to setup chip fabrication units. The authorities, around 2013-14, had announced that India was getting ready to house two chip manufacturing plants with more than $5 billion in investments. First, the joint venture between Jaypee Infratech, IBM and Israel’s Tower Jazz, was scrapped followed by scrapping of a similar project that involved the likes of STMicroelectronics.
Investors, at that time, were in doubt about the potential of the plan that the Indian authorities had made to set up a 22 nanometer (nm) chip.
“India has tried several times to build Fabs with private sector players – for semiconductors, Solar and Display Panels. These efforts have been on-going since 2006-’07. Very large conglomerates have been involved, with marquee top-notch international collaborations. None have succeeded,” PVG Menon, now CEO ESSCI, had said in an interaction with Electronics For You earlier.
He had also said, “If one or two had failed, one could have faulted the private sector. When so many attempts have successively failed, I submit that it is time for Policy Makers to take a good hard look at why they are failing to meet the expectations of the private sector. So many successive failures, and with so many different consortia and companies, clearly points to either serious policy shortcomings, or a massive failure of implementation.”
India’s focus on electronics
The government of India, during the last two to three years, has been focusing alot on the electronics sector. Various production linked incentive schemes (PLI) have been announced around products ranging from the likes of smartphones to components that are used in manufacturing of electronics. Coal India, one of world’s biggest coal mining companies, have also recently shown interest in setting up a solar wafers’ manufacturing facility in the country.
The government recently announced that the production linked incentive (PLI) scheme for large scale electronics manufacturing and IT hardware, along with the scheme to promote component manufacturing will reduce the country’s dependence on Chinese electronic products.
Along with these schemes, the government is also engaging in broad-base outsourcing of electronic parts and raw materials along with “making available the indigenous counterparts of the Chinese electronic products” by promoting domestic manufacturing, informed Minister of State for Electronics and IT Sanjay Dhotre.
“The National Policy on Electronics 2019 (NPE 2019) has been notified on February 25, 2019. The vision of NPE 2019 is to position India as a global hub for electronics system design and manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally,” Dhotre had said recently.
