Investment flows to Set up Chip  Units  Likely  by 2022-End

investmentThe flow of investments from companies seeking to benefit from the government’s plan to establish a semiconductor industry in India may begin within a year, Ashwini Vaishnaw, communications and information technology minister, said in an interview.

Last week, India approved a $10 billion incentive plan to establish chip and display industries in the country as it seeks to become an electronics manufacturing hub. The government expects to attract investments worth 1.7 trillion for more than 20 units.

The Centre plans to notify the scheme in a few weeks, fast track approvals and handhold companies as they set up a manufacturing base in India, Vaishnaw said, adding a workforce of 85,000 semiconductor engineers is being readied to help overcome the chip shortage. Edited excerpts:

Under the semiconductor incentive plan, how do you see the development of the ecosystem over the next couple of years?

Every country wants a semiconductor fab because that’s the sunrise area. Our policy is different. First, we have thought of a clear ecosystem: from design to fab to the smaller ones, the compound semiconductors, to packaging industry, to creating talent and, then, finally, giving a clear 20-year road map to the industry. Second, 15 years back, there was hardly any electronics manufacturing in India. Today, we have $75 billion worth of electronics manufacturing. So whether we produce chips for automobiles or display for TV, there’s a local market ready to absorb this production. Third, a talent pool of 85,000 semiconductor engineers is being readied as part of the scheme. Sixty institutes—best of the IITs, NITs, engineering colleges, global exchange programmes—are going to collaborate on what we’re calling a chip to startup, as many of these students will become entrepreneurs.

How will the government ensure India becomes the primary alternative to Taiwan and other chip-making countries in three to four years, especially when alternatives like Vietnam have already come up in electronics supply chains?

This is an execution-focused government. So, the policy decision (on semiconductors) has happened. In the coming few weeks, you will see the notification of the actual schemes, and within a few months, you should see the approvals in place and, hopefully, within a year, you should see some plants doing the groundbreaking. We’re confident about that because we have done extensive consultation with fab makers, display, design and equipment makers, the supply chain and with academia.

What kind of handholding for big investors is the government planning?

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