Make in India’ campaign driving Semiconductor Industry growth in India

 The ‘Make in India’ campaign was launched by Prime Minister Narendra Modi on 24th September 2014 on the backdrop of India’s lowest growth rate in a decade. Global investors debated whether the world’s largest democracy was a risk or an opportunity; whether India was too big to succeed or too big to fail..

For semiconductor and electronics manufacturers, this means a solid and sustainable economic opening and stabilization. In 2014-15, electronics system design and manufacturing (ESDM) market in India was estimated to be around $90 billion, of which around 65-70 per cent of the demand was met through imports.

 As of today, the industry expects the country to reduce its dependence on electronics imports by almost 15 percentage points to around 50 per cent by 2016-17. While the demand for electronics hardware in India is projected to increase to $400 billion by 2020, the estimated domestic production is only estimated to rise to $104 billion, creating a gap of $296 billion, which has to be met through imports….

Some notable developments in the semiconductor sector

·         The Indian Government is finally investing $10 billion to set up two computer-chip manufacturing facilities in a bid to achieve the target set for zero import of electronics into the country by 2020. The two approved projects are led by Jaiprakash Associates Ltd, which is teaming up with International Business Machines Corp. (IBM) and Israel-based TowerJazz, to set up a Rs.29,000 crore unit in Greater Noida. Also, Hindustan Semiconductor Manufacturing Corp. has partnered with French-Italian electronics and semiconductor maker STMicroelectronics NV and Malaysia-based wafer manufacturer Silterra, to set up a Rs.34,000-crore facility in Prantij, near Gandhinagar. $400 million has also been set aside by the government to build a microprocessor design unit to cater to the growing demands for mobile devices.

·         AMD, the second largest computer chip manufacturer has partnered with Hindustan Semiconductor Manufacturing Corporation (HSMC) to fabricate chips in India. AMD has not previously owned any chip-manufacturing plants elsewhere in the world.

·         Panasonic, GE, Bosch and Tejas Networks, amongst other leading multinationals, have announced investments worth Rs. 6,500 crore in the electronic, telecom, automotive and medical manufacturing sectors in India. The government plans to increase GDP growth rates and take the share of manufacturing in India’s GDP mix from 17 per cent at present to 25 per cent in 10 years, and generate jobs for the 12-15 million hopefuls who join the workforce every year.

·         NXP Semiconductors have introduced two new technology platforms, WaRP7 and Hexiwear, in an approach that is contributive to the Make-in-India programme. These two platforms, primarily focused on the Internet of Things (IoT) and wearables segment, will enable faster product creation and have all the elements of motherboard, sensors, electronics and software for the country’s electronic system design and manufacturing (ESDM) industry to build their products. The startup ecosystem will receive a major boost as NXP’s new platforms will enable entrepreneurs, startups and even SMEs to focus on critical things where they can add value. From the current level of $5.6 billion and 200 million connected units, the IoT market in India is expected to touch $15 billion by 2020 with 2.7 billion connected devices with the help of such innovative rationales.

·         The government, in consultation with semiconductor industry, has increased focus on the ESDM sector in the last few years. Some of the initiatives outlined in the National Electronics policy and the National Telecom policy are already in the process of implementation, such as Preferential Market Access (PMS), Electronics Manufacturing Clusters (EMC) and Modified Special Incentive Package Scheme (M-SIPS). With the implementation of fabrication capabilities