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Decoding India's Semiconductor Manufacturing Aspirations.



  Oct 26, 2023

FAQ: India’s Ambitious Semiconductor Manufacturing



Why is India venturing into semiconductor manufacturing?

India aims to reduce its heavy reliance on semiconductor imports and boost its technological self-reliance. The government has introduced a $10 billion incentive package for this purpose.

What exposed India’s vulnerabilities in the semiconductor supply chain?

The COVID-19 pandemic and subsequent global disruptions exposed the country’s dependency on imports, making it clear that domestic production capabilities are essential.

How is the Indian government supporting this sector?

The Ministry of Electronics and Information Technology (MeitY) has introduced a $10 Bn commitment through the India Semiconductor Mission (ISM), which includes funding, manufacturing incentives, and the Design Linked Incentive (DLI) program.

What challenges does India face in this endeavor?

Setting up semiconductor fabs is capital-intensive, and India also faces competition from established global players. Resources like clean water, uninterrupted power, and skilled labor are also needed.

Are there any collaborations to bolster India’s semiconductor industry?

India has entered into Memorandums of Understanding (MoUs) with international consortia to establish semiconductor fabs in the country. The government is also offering financial support to cover project costs.

What long-term benefits does India expect?

Investment in semiconductor manufacturing will contribute to India’s technological advancement, create employment opportunities, and make the country less vulnerable to global supply chain disruptions.

Are there specific locations identified for these fabs?

States like Karnataka, Tamil Nadu, Telangana, and Gujarat have been chosen for their existing infrastructure and availability of skilled talent.

What sectors will benefit from this move?

Automotive, telecom, and medical devices sectors stand to benefit significantly, alongside a general boost in electronics manufacturing and employment.

What is the future outlook?

Despite challenges, India aims to create a robust semiconductor manufacturing ecosystem that contributes to economic growth, technological advancement, and strategic autonomy.

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