In a promising development for India's electronics industry, the government has announced that the country is poised to outpace China in securing significant investments in the semiconductor sector.
Minister of State for IT & Electronics, Rajeev Chandrasekhar, revealed that India is on the verge of finalizing deals for up to two mega semiconductor units by October-November. These units will focus on manufacturing silicon fab and compound fab, catering to the increasing demand for semiconductors.
Chandrasekhar expressed confidence in the upcoming approvals, stating, "I am willing to tell you with reasonable confidence that before October or November this year, fabs will be approved. This will be fab manufacturing, the actual wafer fab." He highlighted India's emergence as a trusted partner in the electronics ecosystem, making it an attractive destination for semiconductor companies to invest.
One of the significant factors driving these investments is the robust demand for electronics across consumer sectors in India. Chandrasekhar emphasized that the country is heading towards a critical mass in the electronics industry, targeting a substantial revenue of $300 billion by 2026. As a result of this growth, the demand for semiconductors is projected to soar, estimated to reach $110 billion by 2029.
Chandrasekhar attributed the growing interest of semiconductor companies to Micron's $2.7-billion packaging and testing unit, which is set to establish its presence in Gujarat, India.
Micron, being one of the world's largest semiconductor memory companies, is seen as a significant achievement for India. The minister expressed confidence that more companies would follow Micron's lead, citing the "first-mover advantage" when investing in India.
Comparing India's potential with China, Chandrasekhar highlighted China's heavy reliance on semiconductor imports despite exporting electronics worth $900 billion annually.
He pointed out that China has spent a staggering $200 billion on semiconductors in the last two decades without achieving desired results. In contrast, India's semiconductor incentive package for investors amounts to just $10 billion, giving it a unique opportunity to surpass China's progress in the semiconductor industry with considerably lower investments.
"Just to give you a sense of the semiconductor intensity in electronics, China exports $900-billion worth of electronics, but simultaneously needs to import almost $600 billion of semiconductors. They have spent $200 billion in the last 20 years on semiconductors and flopped," he said.
"We are spending just $10 billion (incentive package for investors) and we will be in a position to achieve what even bigger countries - who have spent 10 times more money - have not been able to achieve in over 20 years. We have a big opportunity, at least in semiconductors, to surge ahead of China," the minister was quoted by the Times of India as saying.
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