‘Indian plants will make a sizable amount of chips by next year’

Ashok Chandak, the president of the India Electronics and Semiconductor Association (IESA), tells DH’s Gyanendra Keshri that the industry expects the government to allocate additional funds to continue the programme it launched in 2021 to help develop the semiconductor manufacturing ecosystem in the country.

Excerpts:

How do you see the potential for India to become a global semiconductor hub?

Just five or 10 years ago, hardly any company in India was interested in semiconductor manufacturing. But significant progress has been made on multiple fronts in recent years. Several projects have been approved. Most of these projects are front-ended by Indian companies. The Indian entrepreneurs showing interest in joint ventures and partnerships for chip manufacturing companies is a breakthrough.

Why are the companies showing so much enthusiasm now?

After the supply chain disruptions a few years ago, every country understood that semiconductors are strategically very important. Global companies realised that they needed to diversify and reduce their risks of being clustered into one or two countries. They started looking at options. The Indian government formulated a policy, which is very conducive for investments. You have 50 per cent PLI benefits plus additional incentives from the state governments, fast-track approvals, and so on.

The allocation of Rs 76,000 crore for incentivising semiconductor manufacturing in India is almost exhausted with the approval of five big projects. Do you expect a new incentive scheme?

We expect the government to continue with the scheme and allocate additional funds for it. To be globally competitive, you need a cluster of multiple projects to operate together so that you achieve the right economies of scale. There is a need to develop various related downstream and upstream efficiencies.

When do you expect India to be self-reliant in chip manufacturing?

We will never be 100 per cent self-reliant and that is not required too. The chip business is global. You will have to look at multiple countries for the manufacturing value chain and the marketplace. Some of the chip assembly units are expected to start supplying assembled chips by the end of this year or early next year. By next year, we will see a sizable amount of chips coming from Indian plants. A part of it is going to be exported. Thousands and thousands of varieties of chips are required. you will not be able to make everything here. What we make here, a part of it will be exported, and we will have to keep importing too.