Semiconductors: The growth of the industry will yield hefty dividends

By Sanjay Gupta

As the technology sector leads, the domestic electronics market is set to grow dramatically in the coming years, driven by demand for cloud computing, 5G deployment, connected vehicles and online education. When it comes to technology, we cannot overlook semiconductors, which are the backbone of every technology development company. Nothing has been left untouched by semiconductors, whether it’s artificial intelligence (AI) smartphones, the advent of the Internet of Things (IoT), 5G, or the automotive industry.

Government initiatives to grow the manufacturing industry
Initiatives such as Digital India and Smart City programs have boosted the demand for IoT in the electronic device industry. The government’s Atmanirbhar Bharat initiative is driving significant change as the focus is now also on expanding hardware manufacturing in India. Due to the lack of a level playing field compared to competing nations, the electronic hardware manufacturing sector is handicapped by 8.5% to 11% due to lack of adequate infrastructure, domestic supply chain and logistics problems. high financing costs; insufficient availability of quality electricity; limited design capabilities and industry focus on research and development; and inadequacies in skill development as primary barriers. The National Policy on Electronics, launched in 2019, envisions making India a global hub for Electronic Systems Design and Manufacturing (ESDM) by nurturing and advancing core component development skills and creating a competitive environment for the industry worldwide.

Launched in late 2021 to incentivize production, the PLI program is one of the government’s most recent initiatives. It is expected to attract around US$4 trillion in investment over the next five years and has the potential to employ over 3 million Indians. The program has received applications for semiconductor and display factories worth US$20.5 billion (153,750 crore) in total investment, which is a positive step towards independence.

Semiconductors contribute to economic growth
India still lags far behind the developed countries in semiconductors. Semiconductor fabs have proven to be game changers for the economies in which they operate, creating tremendous jobs and generating significant revenues for the governments concerned. But to build a larger semiconductor ecosystem, the government must outline a clear strategic vision.

Although India is still a few years away from becoming a semiconductor manufacturer, many international companies operate design centers here, which account for about 20% of the world’s design skills. In addition, the Semicon India Program was launched here with an incentive effort of USD 10 billion with the aim of developing a sustainable semiconductor and display ecosystem in the country. This program will help India become a global hub for semiconductor and display manufacturing while promoting self-reliance, strengthening global supply chain resilience and paving the way for India’s technological leadership in the industry.

The author is Vice President and General Manager of India – NXP Semiconductors Semiconductors: The growth of the industry will yield hefty dividends

Chris Barrese

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