A joint report of India Electronics & Semiconductor Association and global technology market research firm Counterpoint Research has stated that India’s chip usage can balloon to $64 billion by 2026 and is further projected to expand to $110 billion by 2030. The figure of $110 billion would account for about 10% of global semiconductor consumption, mentioned the report. It is clear that the significance of these chips has increased recently, thanks to the potential revolution that AI (artificial intelligence) is about to unleash all around us.
During the COVID-19 pandemic, different countries faced severe constraints since chip manufacturing was concentrated in China. Moreover, manufacturing companies are realising that such disasters as well as tensions arising out of trade war between the US and China urgently called for diversifying the semicon fab manufacturing industries.
Major upcoming units in India
According to media reports, at least 5 semiconductor units are under development in India. The major names associated with these projects are the Tatas and US firm Micron Technology. The chip fabrication unit of Micron Technology will be located in Sanand of Gujarat. It will be manufacturing memory chips for use in smartphones, notebooks, data centers etc. The first Made in India chips are expected to hit the market by 2025.
On the other hand, Tata Electronics, has struck a deal with Taiwan’s Powerchip Semiconductor Manufacturing Corporation for establishing a semiconductor manufacturing plant in Dholera, also in Gujarat. The ballpark investment associated with this project is Rs 91,000 crore. This factory has the ability to generate more than 20,000 direct and indirect jobs. One of the units of the Tatas will also be located in Assam. Reports state HCL Technologies and Dixon Technologies are other prominent names active in this sector.
Semiconductor and its significance
The tailwinds began blowing in 2021 with the launch of “India Semiconductor Mission” that had the avowed objective of attracting investment in chip fabrications, display fabrication units, and ATMP (Assembly, Testing, Marking, and Packaging) facilities. The FY25 budget is offering subsidies of up to 20% of capital expenditure. As much as Rs 4,000 crore has been earmarked for training engineers and technicians in this sector.
Investing in semiconductor stocks
Experts have pointed out that in future companies in the semiconductor can become the centre of attraction of investors as has happened in some countries. Demand for semiconductor chips is soaring in automotive, consumer electronics, telecommunications, and healthcare sectors. It will provide ample tailwinds to this industry. The government is backing this emerging sector to the hilt.
One of the new-age items where India could gain a manufacturing edge is semiconductor chips. It has also got long-term implications for investors, who need to be patient, argue experts. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
