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India’s Semiconductor Push
Context:
- Recently, Prime Minister Narendra Modi underscored India’s burgeoning potential in the semiconductor industry during the ‘Semicon India’ event in Greater Noida.
- He highlighted that the time is ripe for investments in India’s electronics sector, which is poised for remarkable growth.
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- The country’s current electronics market, valued at over $150 billion, is targeted to reach $500 billion by the end of the decade.
- This ambitious goal is expected to generate approximately 6 million jobs for India’s youth, a significant boost to the national workforce.
India’s ambitions
- India’s strategic focus is on developing a robust ecosystem for semiconductor manufacturing within its borders.
- The country contributes to 20% of global semiconductor design and is set to expand this share further.
- The government’s plan includes creating a workforce of 85,000 skilled professionals in the semiconductor field and enhancing domestic production capabilities.
- The PM also highlighted the pivotal role of semiconductor chips in advancing India’s digital infrastructure, which supports last-mile connectivity across the nation.
- The government has committed significant resources to boost semiconductor manufacturing, offering 50% support from both central and state governments.
- Approximately ₹1.5 trillion worth of projects have already been approved, with many more in the pipeline.
- In conjunction with these announcements, executives from major semiconductor companies also made significant commitments.
- NXP revealed plans to invest $1 billion in India-based R&D over the next few years, while Renesas announced an intention to more than double its headcount in India by next year.
National Electronics Policy (NPE) 2019
Approved on February 19, 2019, the National Electronics Policy 2019 aims to make India a global leader in Electronics System Design and Manufacturing (ESDM).
Objectives:
- Global Hub: Establish India as a key player in ESDM.
- Economic Growth: Achieve a $400 billion turnover for the electronics sector by 2025.
- Employment: Create 10 million jobs in the sector.
- Mobile Production: Manufacture 1 billion mobile handsets by 2025, with a focus on exports.
To boost investment and exports in the electronics sector, three schemes have been introduced under NPE 2019:
- Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing
- Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)
- Modified Electronics Manufacturing Clusters (EMC 2.0)
Semicon 2.0
- The event also marked the forthcoming launch of the second phase of the India Semiconductor Mission (ISM).
- ISM 2.0, set to be unveiled in the next three to four months, will significantly expand on the initial phase’s scope.
- The ISM initiative, which started in 2021, aims to establish India as a global hub for electronics manufacturing by focusing on investment, research, and design in semiconductor technology.
- The first phase of the ISM, with an allocation of ₹76,000 crore, saw the approval of five major chip projects by the Union Cabinet.
- As the country progresses with ISM 2.0, the emphasis will be on enhancing various segments of the semiconductor ecosystem, including equipment manufacturing and assembly, testing, marking, and packaging.
- The new phase of the ISM will include a broader range of activities, such as attracting equipment manufacturers, promoting the development of specialised materials, and securing essential chemical supplies.
- The upcoming phase will also focus on expanding semiconductor facilities, with Uttar Pradesh set to become the fourth state to host a semiconductor unit, joining Gujarat, Assam, and Maharashtra in this venture.
