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By When Will India Start Manufacturing Semiconductors?

Semiconductor ManufacturingHeading towards the end months of 2021, anyone and everyone having even a minute interest in technology must know the acute significance of a semiconductor and how the previous year’s transgressions made a powerful impact on every industry.

To summarize, as the demand for digital devices went up as people switched to remote working in mass, the supply of semiconductors to various industries failed to meet the expectations due to the lack of manpower in the manufacturing fabs. This led to a great uproar in the digital world since semiconductor was like the brain or mastermind holding all the pieces together of every digital product.

Many countries were forced to shut down their multiple industries due to this sudden shortage and India was no exception.

Living in a developing country like India with a gigantic customer base of digital users and its products, the country still struggles deeply in terms of manufacturing even for some basic digital devices.

That’s the sole reason that India is a heavy importer of digital as well as semiconductor-related products with 100% imports in the electronics sector.

Sensing this acute lack of Semiconductor Manufacturing Plant in India in this technology upgraded world where people rely heavily on all kinds of digital devices, the Government of India is ready to take impactful and drastic changes in their foreign policy to revitalize the stagnant industry of Semiconductor manufacturing in the coming years.

Before going full throttle in the various initiatives and policy upgrades done by the government in the last few years as well as recently, let’s check out some of the drastic impact, the shortage of semiconductor chips have done on India and its industries, that spurred the government to go an extra mile in setting up the Semiconductor Manufacturing Plant in India.

Repercussions of Lacking Semiconductor Manufacturing Plant in India 

India FabThough we had insistently talked about the urgent need for setting up a Semiconductor Manufacturing Plant in India and “Can India Join Semiconductor Manufacturing League?” in our previous articles, we did not delve that much into details about the aftereffects India’s multiple industries encountered due to worldwide shortage of semiconductors.

Here we will be shedding some of the most popular delays some bigshot companies in India had to take due to this shortage.

Reliance Jio’s most awaited launch of the low-cost smartphone, JioPhone Next, got a considerable delay and is now expected to be launched around Diwali.

Another heavy impact of lacking Semiconductor Manufacturing Plant in India was seen in the automobile industry of India as modern vehicles are heavily dependent on semiconductors and their integration in multiple automotive digital products.

One of the most popular automotive companies in India, Maruti Suzuki had registered a 60 percent cut in its production in previous months due to a shortage in the supply of semiconductors.

On the other hand, Mahindra and Mahindra (M&M) also showed a cut output of 20 to 25 percent in the previous months.

And the list did not end here, as vast deliveries of popular iPhone 13 and Sony PS5 were affected due to the global semiconductor chip shortage.

Saga of Semiconductor Fab Set-up 

India FabConsidered a pipedream a decade ago, Semiconductor Manufacturing Plant in India did not garner much-needed attention in the early years of the 2000s.

This cause can be attributed to the lack of the establishment of semiconductor wafer fabrication (FAB) units in the country due to a weak ecosystem and lack of suitable government policies as well as a shortage of resources in the semiconductor industry as compared to the more competitive bases in the neighboring countries like China, Taiwan and Vietnam.

In the early months of 2007, Intel showed its keen interest in setting up a fab plant in the Asian country but chose China and Vietnam due to the extreme lack of the Indian govt’s unattractive incentives.

Though the Indian Government decided to venture into Semiconductor Manufacturing Plant in India and gave permissions for setting up two fab projects, by Jaypee and by Hindustan Semiconductor Manufacturing Corporation, the deal fell through halfway as both the companies failed to show validated proof of funding.

Entering the year 2020, as the world started showing signs of semiconductor chips shortage at a global scale, Govt started inviting tenders and applications to big shot companies to set up Semiconductor Manufacturing Plant in India, the response rate came up as lukewarm.

Still, as we forayed into 2021, the Tata group expressed its desire to enter into the semiconductor business.

Now as several cards are on the table with govt expressing its keen focus to promote self-dependency or “Atmanirbhar Bharat” with the build of Semiconductor Manufacturing Plant in India, the country has opened its doors to consider a collaboration deal with the leading semiconductor manufacturing giants like Taiwan to lead the future of semiconductor industry to a global level.

Entering the World of Endless Possibilities

As our current Minister of State for Electronics and IT cited in his most recent interview, “The government is working on a policy roadmap to create champions in the design of electronic systems and semiconductors in India and hopes to announce new initiatives in this regard from as early as next month”

The minister has also expressed the government’s ardent desire to project India not only as the leader in software pieces but also in the hardware sector of electronics.

And with new policies and big collaborations, the possibility to build Semiconductor Manufacturing Plant in India is not impossible to achieve.


Aishwarya Saxena

A book geek, with creative mind, an electronics degree, and zealous for writing.Creativity is the one thing in her opinion which drove her to enter into editing field. Allured towards south Indian cuisine and culture, love to discover new cultures and their customs. Relishes in discovering new music genres.

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