India will “definitely” be considered as one of the destinations for a semiconductor manufacturing facility by the world’s biggest power and smart card chip firm Infineon as and when it expands to new locations, the company’s global CEO Reinhard Ploss has said. He said that in case the company ventures into India with electronic chip production it will start with investment in assembly, testing and packaging of semiconductors and scale up gradually.”We are still watching if we think about major site, we will definitely consider India. Currently we built and grow around locations we have at present. Therefore, no new site is planned. Before building new site we have to scale existing facility to build economies of scale,” Ploss told PTI.
The German chip company has its sales office and research and development centre in India. As per market research firms, Infineon led global power electronic chip market with 18.5 per cent share and smart card chips segment with 24.8 per cent share in 2016. It was second largest chip firm for automotive electronics with 10.7 per cent share in 2016, as per research estimates.
Ploss was responding to queries about Indian government’s ambition to set-up electronic chip plants in the country to meet security as well as to reduce dependence on electronic imports. “We believe that local procurement and establishment of a vibrant local manufacturing base which provides good employment opportunities to India will be a positive step. Reliance on imports is not sustainable for an economy which aims to reach $5 trillion by 2025,” he said.
The Cabinet had initially cleared setting up of the two semiconductor plants in September 2013. A global tender was issued to invite interest from other semiconductor firms to set up plant in India. The government had promised same incentives as the two electronic chip plants, but no company turned up.
Hindustan Semiconductor Manufacturing Corporation (HSMC) is the only electronic chip firm that is working with the government to set up India’s first semiconductor plant. The government had also approved the JP Associates-led consortium’s plan to set up one more plant, but the group backed out in the absence of an appropriate market.
HSMC has approached the government seeking market commitment to set up a high-technology electronic chip plant that entails investment of around Rs 29,000 crore. Ploss said that there are still areas which need to be improved in India mainly power supply stability, infrastructure, education.
“Infineon has been working closely with the Electronics Sector Skills council of India (ESSCI) in this regard,. We are sharing our experience in setting up large manufacturing units in emerging markets. Last year in August, we hosted a delegation of master trainers from India at our largest manufacturing plant in Melaka, Malaysia,” he said.
The company last week signed an agreement with Niti Ayog to support Atal Innovation Mission (AIM) under which it will share design, manufacturing experiences and knowledge in semiconductor systems. “We are leveraging our presence in India along two pillars “’India for India’ and ‘India for Global’,” Ploss said.
Under the ‘India for India’ strategy, the company has been expanding its sales and marketing resources in the country. It is looking at big potential around electrical vehicles in India. It is also partnering with Indian academia and start-ups to build new applications. “Under the second pillar, we are growing our R&D activities in India.
Our design centre in Bengaluru in working on global technical projects in hardware and software. While we do not disclose the size of revenues in India, we see the country as having tremendous growth potential due to favourable macros and policies coming together,” Ploss said.