Last December, the government approved a $10-billion incentive plan to boost semiconductor manufacturing in India. Given how the pandemic crippled the semiconductor supply chain around the world, the country has decided to amp up its chip game with localised manufacturing.
While $10 billion sounds like a reasonable investment, it would not be enough to compete with global players, said Raj Kumar, Founder and Group CEO, IGSS Ventures, a tech investment holding company.
Though India was slightly late in the semiconductor game, Kumar said this could be used to the country’s advantage. “There's one key advantage if you're late, that is to learn from the mistakes and the positives of other semiconductor-building nations. They started earlier and there are many valuable lessons that India can learn from that. For example, India’s budget is $10 billion. I think it's a reasonable budget to start with, but not enough to compete globally. China, for example, has in the last 30 years or so easily invested half a trillion dollars in semiconductor. The pioneers in semiconductor and IC chip design are even today spending $50-$70 billion. So, India’s $10 billion is a decent number,” he said, speaking at Semicon India 2022, which was held from April 29 to May 1 in Bengaluru.
The founder went on to explain how the country could best optimise this investment and do things in a much better way than other nations. “There is the $10 billion from the government and if we assume another $10 billion comes from the private sector, then $20 billion can now be used in the same way a $40-billion investment was used earlier.”
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