Communications and IT minister Ashwini Vaishnaw on Wednesday said India is the most cost effective country with regard to semiconductor manufacturing and is the only place with talent.
“India’s approach of developing a comprehensive ecosystem (for semiconductors) is absolutely the right thing. Industry leaders highly appreciated the actions taken so far,” Vaishnaw told FE.
Vaishnaw, who is on a three-day visit to the US has met officials from major companies in the country, including Google CEO Sundar Pichai. The minister will also be meeting companies like Intel, Micron, Western Digital, Applied Materials, HP, etc, and participate in industry events during his visit.
“Semiconductor industry will double from the current $600 billion to $1 trillion plus. Everyone was admiring the decisive leadership of the Prime Minister,” Vaishnaw said.
On Wednesday, Vaishnaw also tweeted that the government signed a memorandum of understanding between India Semiconductor Mission (ISM) and Purdue University in the US, for cooperation in capacity building, research and development, and industry participation.
In a discussion with Google CEO Sundar Pichai on Tuesday, Vaishnaw discussed the India stack and Make in India programme.
“Thank you for taking the time to visit us at the Googleplex, minister Ashwini Vaishnaw. Enjoyed discussing the many ways we’re working together on India’s digital transformation, and the opportunities ahead,” Pichai tweeted.
The country’s semiconductor market is expected to reach $64 billion by 2026 largely led by both domestic and export markets with significant demand from the consumer electronics, telecom and IT hardware sectors, according to a joint report by Counterpoint Research and the India Electronics & Semiconductor Association.
India’s telecom stack as well as industrial applications are expected to account for two-third of the semiconductor market size, the report said. In 2019, the country’s semiconductor market was valued at $22.7 billion.
The government had in December 2021 announced a Rs 76,000-crore incentive scheme for the development of semiconductors and display manufacturing ecosystem. In September last year, the incentive was further sweetened by the government by making the fiscal support at 50% of project cost for setting up a semiconductor fabrication facility . Earlier, the fiscal support varied between 30-50% for different units.
Companies such as Vedanta-Foxconn JV, IGSS Ventures and ISMC have proposed to set up chip manufacturing plants with $13.6 billion investment and have sought support of $5.6 billion from the government under the incentive scheme. Of the proposals received, the government is yet to approve the two proposals.