Semiconductor Shortage Huge Opportunity For Domestic Auto Components Industry: SIAM President

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Last week, Union minister Piyush Goyal said that the government is committed to supporting establishing the semiconductor industry in the country

The persisting chip shortage under which industries all over the globe have been reeling could turn out to be a huge opportunity for Indian auto component manufacturing companies, as per Society of Indian Automobile Manufacturers (SIAM) President Kenichi Ayukawa.

“While the semiconductor shortage appears to be a challenge, it also brings in an opportunity. Of course, semiconductor manufacturing requires very huge investments. The Indian automobile industry alone cannot assure full viability of such an investment in semiconductor projects. Hence, there is a need for consolidation across sectors,” Ayukawa said while speaking at the Automotive Component Manufacturers Association of India (ACMA) annual session.

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Ayukawa, who is also the Managing Director and CEO of Maruti Suzuki India, said the demand for technology-based equipment has increased manifold in various sectors alongside the automotive segment.

The global semiconductor supply chain which has been impacted heavily with the onset of the coronavirus pandemic last year has impacted several industries, particularly the auto industry, all over the world.

“The invitation by the government for expression of Interest for manufacturing semiconductors in India is a much needed, long-term step, in the right direction. I am sure global investors will take advantage of this opportunity in India,” Ayukawa noted.

Last week, Union minister Piyush Goyal said that the government is committed to supporting establishing the semiconductor industry in the country which will also help in reducing foreign exchange outflows.

Goyal said creating the semiconductor industry and strengthening the shipping industry will help push the ‘Aatmanirbhar’ initiative of the government, adding that it is very much focused on bringing the semiconductor industry to India.

In the meantime, the domestic component industry would have to tackle the current challenge of semiconductor shortage, by deeply engaging with the chip suppliers, Ayuwaka added.

“The challenge of COVID-19 continues globally. Different regions are being impacted at different times. While the global supply chain is already very complex, such disruptions and uncertainties further add to the challenge. Hence our preparation has to keep pace with the growing challenges,” Ayukawa noted.

On the government’s Aatmanirbhar Mission, the industry leader stated that aligning with the government, SIAM and ACMA have jointly developed a localisation roadmap for the automobile industry.

“This roadmap details key components across segments and the corresponding opportunity for localisation. Look forward to the support of each industry member in this initiative to make India Aatmanirbhar,” Ayukawa said.

Such an initiative could succeed only with full support from the government, he noted , adding that they would jointly approach the government to seek support for this roadmap.

Touching upon the development of new-age technologies, he said that all across the world, there is a huge focus on reducing carbon emissions.

“As a responsible industry, it is our duty to move as close as possible to Carbon Net Zero with local manufacturing. For this, we have to develop multiple alternate powertrain technologies,” Ayukawa noted.

While lauding the support and encouragement from different government ministries on multiple technology solutions, including e-mobility, he urged the auto component industry to enhance its focus, investments, research and development on all such powertrain technologies.

“I am sure, only the combination of all these technologies will help us be closer to Carbon Net-Zero. Many of these technologies are new for the industry and have their own challenges of viability and infrastructure. While our talented engineers work on these solutions, we would keep coming back to the government for guidance and support,” Ayukawa stated.

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