Manufacturing of Semiconductors in India

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The semiconductor industry has been witnessing a significant rise in its demand in the last few years. The high adoption of electronic devices, such as smartphones and tablets, has led to the growing market for semiconductors. In addition, the increasing demand for semiconductors in various applications, including consumer electronics and industrial machinery, is expect to drive growth during the forecast period.

The Indian semiconductor market is expect to grow at a CAGR of 15.7% during the forecast period of 2017-2023. The automotive sector accounted for the major share of India’s semiconductor consumption in 2016 and is anticipated to dominate over the next few years. The increasing number of vehicles on roads across all regions, especially Asia Pacific, is expected to drive the demand for automotive electronics.

The government of India is focusing on developing an ecosystem that can support and sustain innovation in designing and manufacturing of electronics systems in India. For instance, under National Policy on Electronics, 2012 (NPE 2012), a new scheme called “Modified Special Incentive Package Scheme” (M-SIPS) provides subsidy to integrated circuit (IC) design and electronic system design manufacturing companies with a view to promote indigenous electronics manufacturing and attract investments worth USD 1 billion by 2020.

Semiconductor manufacturing companies in India

The semiconductor manufacturing industry is the aggregate of companies that design, develop and manufacture semiconductor devices. Semiconductors are use in a variety of applications, but the largest single end-use is the electronics market.

  1. Intel
  2. Texas Instruments
  3. STMicroelectronics
  4. Analog Devices
  5. NXP Semiconductors

Initiative by Indian Government for the Semiconductor Industry:

India has an edge over competition in the electronics manufacturing industry due to its large domestic market, skilled labor and sound legal framework. As the fourth largest economy in the world, India is well-poise to attract a significant share of global electronics manufacturing investment.

The Government of India has taken several initiatives to make India a global hub for electronics manufacturing and has laid out a roadmap for the next five years.

The Indian government’s Make in India program aims at transforming the country into a global design and manufacturing hub. The government established a 40 billion dollar fund, named ‘Electronic Development Fund’, which will used to support domestic companies involved in research and development of electronics products. The Semiconductor Fabless Association (SFA) has formed by the Indian Electronics & Semiconductor Association (IESA) with an aim to develop the Indian fabless ecosystem.

Under the National Policy on Electronics, 2012 (NPE), all electronic products will cover under compulsory registration scheme from October 1, 2015 and no manufacturer/importer can sell any electronic product unless it is register with Bureau of Indian Standards (BIS).

The government has announced a number of initiatives to promote the semiconductor industry in India. These include setting up of a National Center for Semiconductor Chip Design, creating an electronic development fund, encouraging the private sector to set up wafer fabrication units, and introducing new tax incentives for the manufacturing sector.

In spite of these initiatives, the semiconductor industry in India is still in its infancy and faces many challenges. The steep drop in prices of chips, emergence of new players in the market and stiff competition are some of the factors which have adversely affected Indian chip producers.

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