In this article, we will discuss India’s Semiconductor Market. So, let’s get started.
India’s Semiconductor Market
- India currently imports all chips and the market is estimated to touch $100 billion by 2025 from $24 billion now. However, for the domestic manufacturing of semiconductor chips, India has recently launched several initiatives:
- The Union Cabinet has allocated an amount of ₹76,000 crore for supporting the development of a ‘semiconductors and display manufacturing ecosystem’.
- India has also launched the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) for manufacturing of electronics components and semiconductors.
- The MeitY also launched the Design Linked Incentive (DLI) Scheme to nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve turnover of more than Rs.1500 Crore in the next 5 years.
- Considering that the global semiconductor market is projected to be $1.2 trillion by 2030, India needs to be well-positioned to capture it.
- The recently announced Semicon India programme which provides $10 bn fiscal support and other non-fiscal measures is a step in the right direction.
- Due to the USA’s allegations on China for worsening Covid-19 and India-China conflict and recent developments because of it, numerous multinational companies (MNCs) are shifting their production out of China.
- This is the right opportunity to establish India as the right choice for setting up production houses for semicon chips.
Significance of Semiconductors
- Semiconductor chips are the lifeblood of the modern information age. They enable electronic products to compute and control actions that simplify our lives.
- The process of making the meticulous semiconductor chips is an excellent example of peacetime global cooperation.
- For instance, it would not be difficult to imagine that the chip in the devices that we use are made by a Japanese engineer working on Dutch machinery in an American foundry in Taiwan to produce wafers which were shipped to Malaysia for packaging before being sent to India as a finished product.
- These semiconductor chips are the drivers for ICT (Information and Communication Technologies) development and one of the key reasons for the current flattening of the world.
- Semiconductors are used in critical infrastructures such as communication, power transmission etc., that have implications for national security.
- Development of the semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain.