By Rajesh Radhakrishnan, Chief Marketing Officer, Vritti Solutions Ltd
With the country on the verge of a digital revolution with its IT and telecommunication capabilities, this Budget is the ideal time for the government to announce policies that will make the country a global manufacturing hub for semiconductors. As the global communication and digital requirement grows, so will be the requirement for semiconductors. India could be the ideal platform for semiconductor manufacturing gelling well with the ‘Make In India’ campaign of the Modi government and making India truly ‘Atma Nirbhar’. Semiconductors can be considered as the brains of modern electronics. They enable advances in communications, computing, healthcare, military systems, transportation, clean energy, and innumerable other applications.
The government should come up with a new ‘Vision Policy for Semiconductor Manufacturing’ in this Budget, which should be aimed at creating an ideal ecosystem for the semiconductor industry to grow and prosper. Right now the global countries manufacturing semiconductors are dominated by companies in the US, Japan, South Korea, Taiwan and Netherlands. China is coming up in a big way in the field.
The government should partner with US, Korean or Japanese governments to encourage major semiconductor players in those countries to pass technical know-how and manufacture in India. The companies can form joint ventures to manufacture the key components required for semiconductors and also the final product. The government should incentivize this manufacturing.
Indian villages could be the hub for semiconductor manufacturing. The Vision Policy should favour the SMEs to set up semiconductor manufacturing units in rural parts of the country by giving tax benefits, incentives to manufacture, and aggressive Industry-Academia interaction. India at present meets its semiconductor requirement through imports. The government should aim at making the country self reliant in semiconductors by 2030. Initially, we need to be part of the global supply chain for semiconductors.
Annual global sales in semiconductors were at $481 billion. The global semiconductor industry has been growing at about 13% for the past 20 years with a high degree of volatility. Therefore a high level of innovation is required to keep abreast with the rapid pace of change in the market. It will be the key driver and technology enabler for the electronics value chain.
US is the leading manufacturer of semiconductors in the world with inputs imported from across the world including China. Even China is dependent on the finished semiconductors made in the US.
Manufacturing of semiconductor is a supremely complex task, which requires 300 odd inputs and high end sophisticated testing. There is a tremendous requirement of a heavily skilled workforce to develop semiconductors. The government should modernize technological education at the premier institutes of the country keeping eye on the skilled work force requirement in areas including Artificial intelligence, Data Analytics and Semiconductor manufacturing and development.
