Realising this vision will involve concerted efforts on the part of all the stakeholders in the ecosystem
By EB Bureau
Wednesday, April 09,2014: The in-principle Cabinet approval for setting up of two semiconductor fabrication units in the country, with expected investments of about Rs 250,000 million, will not only reduce the import of electronic products into the country, but will also boost electronics manufacturing in India.
India currently consumes close to US$ 7 billion worth of semiconductor products every year. By 2020, when the total Indian ESDM market is expected to reach a turnover of US$ 400 billion, consumption of semiconductors is expected to touch US$ 55 billion. With a fab in India, the country could achieve a degree of self-sufficiency in electronics, and partially reduce the very high supply chain risks that India is exposed to, being entirely dependent on procurements from abroad.
The two proposals approved by the Cabinet are led by Israel’s Tower Semiconductor Ltd (TSEM) and by Franco-Italian STMicroelectronics NV (STM). While TSEM is partnered by IBM, STMicroelectronics is in partnership with Hindustan Semiconductor Manufacturing Corp.
Commenting on the Cabinet approval, Dr Ajay Kumar, joint secretary, Department of Electronics and Information Technology (DeitY), said, “It is a historic decision and will change the landscape of the electronics industry in the country.”
These fabs will boost R&D and innovation in the field of electronics, which will eventually help in generating 30 million jobs (both direct and indirect) in the country by 2020.
Welcoming the decision, P V G Menon, president, India Electronics and Semiconductor Association (IESA), said, “The commencement of building the fab comes at a time when the Indian economy is at a point of inflection. It will arrest project costs from further escalation and will give the Indian electronics manufacturing ecosystem a boost, enabling it to take its place as a leader in the global economy.”
Said Aninda Moitra, president and managing director, Applied Materials India, “We believe this decision is a true inflection for the ESDM sector in India. The decision to enable high value manufacturing will have a strong multiplier effect on the economy, which will impact numerous sectors and create employment opportunities across the value chain.”
“The focus now needs to be on execution. Realising this vision will involve concerted efforts on the part of all the key players in the ecosystem, given the greenfield nature of this endeavour. In parallel, there must be an emphasis on skills development and training, tailored to the specific needs of the semiconductor manufacturing industry,” Moitra added.
For the long-term sustainability of the electronics manufacturing ecosystem, it is critical to get the stakeholders together to participate in setting up a scaled semiconductor R&D centre.
The final agreements for the two fabs are expected to be signed by August 2014. The government is offering concessions, including a 25 per cent subsidy on capital expenditure, tax breaks and interest-free loans of about Rs 51.24 billion to each plant.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine
