At a time when the U.S. and EU are aiming to increase their chip manufacturing industries, India is also making strides toward becoming a serious player in advanced manufacturing.
With Mumbai-headquartered Vedanta Group signing pacts with a number of Japanese technology companies to develop an Indian semiconductor and glass display manufacturing ecosystem, Chairman Anil Agarwal’s plan to become a semiconductor maker shows potential.
The pacts were signed at the Vedanta-Avanstrate Business Partners Summit 2022 held in early December at Tokyo.
Akarsh K. Hebbar, Vedanta’s global managing director, Display & Semiconductor Business said that the company is committed to make India a hub for electronics manufacturing. It is focused on taking the lead in creating the electronics industry ecosystem rather than just technology transfers.
India is one of the largest exporters of chips in the world, however, its attempts to produce semiconductors locally in the past have been unsuccessful. The Narendra Modi-led government is pushing to build an entire ecosystem of designing, manufacturing and assembling this product. “The track record has not been great but the new government has been heading in the right direction … [with] policies to drive impetus and attract leading semi and fab companies,” Neil Shah, partner at tech consultancy Counterpoint Research, said.
India is a huge market for the consumption of semiconductors. Its strength is its engineers that design the semiconductors at design centers of international firms, but India doesn’t have a lot of intellectual property, which can be termed its own. The challenge for the country is to build its own technology.
India has signed an agreement with Belgium-based research and innovation hub, Interuniversity Microelectronics Center, which will provide the technology to manufacture chips of 28 nanometers and above, for which the user has to pay a royalty, according to a report.
India’s semiconductor component market is predicted to reach $300 billion in cumulative revenues by 2026. The ‘Make in India’ and production-linked incentives are expected to boost local sourcing of semi-components in the coming years, according to the report by the India Electronics & Semiconductor Association and Counterpoint Research.
Last month, the Gujarat government signed an MoU for $20 billion with Vedanta-Foxconn Group for the manufacture of semiconductors and a display fab. This investment is expected to create a significant impact on the economy and create jobs while creating an ecosystem for ancillary industries. Indian officials are hoping to see construction begin next year, and for operations to begin around 2025.
