As the United States looks to rediscover its mojo in advanced semiconductor manufacturing through a series of policy actions, India is charting out its own roadmap to manufacture chips and join a coveted Asian league with homegrown technology and manufacturing capabilities.
US President Joe Biden signed into law earlier this month the CHIPS and Science Act of 2022, which is expected to push ‘leading-edge’ (nodes containing 5-7 nanometre (nm) chips) investments into a country that gave the world its original Silicon Valley – coined after an accumulation of silicon chip manufacturers around San Francisco, California.
In fact, the Act has already drawn $50 billion in additional investments into America, even as China and Taiwan – two big chip makers - are locked in a tussle that deepened after the visit of Nancy Pelosi, speaker of the US House of Representatives, recently.
The visit clearly showed how the West differs from China on Taiwan’s status, meaning the geopolitics around the island is expected to shock the semiconductor supply chain further.
The US policy measures and geopolitics notwithstanding, the semiconductor market is anticipated to grow at a much slower pace this year, and even suffer de-growth in the next, as supply normalizes through the second half of this year and in 2023 after being squeezed over the previous two years on the back of logistical disruptions from China following the Covid-19 pandemic.
India, meanwhile, has revived a decade-old attempt to woo chip makers, starting with a $10 billion incentive package for the sector that one industry analyst indicated was smaller than the annual spend on semiconductors by some manufacturing nations.
Be that as it may, applicants for the incentive package - such as ISMC Analog, Singapore's IGSS Ventures and Vedanta-Foxconn - have targeted manufacturing of nodes 28 nm and above, used in smartphones and other electronic devices.
In its attempt to gain a toehold in the global semiconductor supply chain, New Delhi has been examining the three applications since February to approve large monetary incentives for backing chip factories in the country, but it faces a two-fold challenge.
First, it needs to arrive at a decision on which of the applicants - ISMC Analog, IGSS Ventures, or Vedanta-Foxconn – should be backed.
The government has already asked Vedanta-Foxconn for details on its technology prowess in pulling the project through, even as it has been holding multiple rounds - involving questionnaires about financial stability, technological know-how, acquisition of skilled human resources and other aspects of the projects - with the other two consortiums.
Second, the country needs to account for the at least two-year period it might take for applicants to build fabs, and the innate cyclicality of the market might force companies to tighten their belts or slow investments.
Nevertheless, India’s domestic semiconductor market is a huge draw for foreign manufacturers.
According to joint research by the India Electronics and Semiconductor Association and Counterpoint Research, the cumulative revenue from the local semiconductor component market would rise to $300 billion through 2021-26, as a range of sectors from mobility to fintech and aerospace consume more electronics.
India will not, however, be hurried through the process, as each is a multi-billion-dollar project.
Read More at https://economictimes.indiatimes.com/tech/information-tech/india-charts-strategy-to-enter-global-chip-market-eyes-homegrown-tech/articleshow/93822655.cms
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