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India sees chipmakers starting local manufacturing in 2-3 years

India expects at least a dozen semiconductor manufacturers to start setting up local factories in the next 2-3 years after the South Asian nation offered incentives for the sector, the country’s information and technology minister said.

Prime Minister Narendra Modi’s government is working on developing a full ecosystem for the chip manufacturing industry and will start taking applications under its incentive scheme from Jan. 1, Ashwini Vaishnaw, who also holds the railways and telecom portfolio, said in an interview with Bloomberg Television’s Haslinda Amin and Rishaad Salamat.

“The response has been very good. All the big players are in talks with Indian partners and many want to come directly to set up their units here. Almost all big ones are talking to us,” Vaishnaw said.

The country intends to get involved in several stages of chipmaking, including silicon and display fabs and semiconductor packaging. It will start with fabrication of mature 28nm to 45nm parts and will request a road map from candidate companies for moving to more advanced production techniques over time, the minister said. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., the leading producers of the world’s most advanced chips, have shown themselves willing to expand internationally with recent announcements of new fabs in the U.S. and Japan, aided by local government support.

Last week, the Modi government approved sops worth 760 billion rupees ($10 billion) spread over six years to boost local chip production, a move which is likely to help the South Asian nation reduce its reliance on expensive imports of the material used in everything from mobile phones to electric vehicles amid a global shortage. Currently, India relies on overseas manufacturers for almost all of its semiconductor requirement.

India joins a growing list of nations from Japan to Europe and the U.S. in setting aside multibillion-dollar subsidies for domestic chipmaking, after a global shortage of the vital components walloped a plethora of important industries and exposed economic vulnerabilities.

The government has already notified the plan and expects compound semiconductor units and design and packaging companies to get approval within the next 3-4 months, Vaishnaw said.

“In next 2-3 years time frame, we see at least 10-12 semiconductors going into production, we see display fab going into production or may be finalizing completion,” the minister, who has an MBA from the Wharton School of the University of Pennsylvania and attended the Indian Institute of Technology, said. “At least 50-60 designing companies would have started designing the products in the next 2-3 years”. Bloomberg

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