India's Semiconductor Dream: Is It Becoming a Reality?
Semiconductors have become the unsung heroes of the digital age. They silently power the devices that have become essential to our lives. These tiny wonders are the backbone of everything from smartphones, computers, advanced medical equipment, and transportation systems.
Without semiconductors, the modern world as we know it would come to a grinding halt. And halt it did. In 2021, the pandemic's impact on the manufacture of semiconductors in South Korea and Taiwan caused a shortage for semiconductors across the world.
The constrained supply impacted industries ranging from automotives to gaming. India too faced issues. In December 2021, Tata Motors announced it was experiencing a semiconductor shortage and that it would impact the deliveries of its cars.
Other Indian automakers also expressed the same. To tackle this shortage, the Indian government announced incentives for semiconductor companies in the same month. These incentives were a part of the ₹760 bn Product Linked Incentive (PLI) scheme.
Following this, various companies including large conglomerates such as the Tata group and the Vedanta group expressed their interest in setting up chip facilities in India. In February 2022, Vedanta announced its plans to set up a semiconductor plant in a joint venture with Foxconn (Hon Hai Precision). The company was one of the first few participants in the government’s PLI scheme.
Later that year, we wrote about how India could be a major semiconductor hub. Some companies like Vedanta were working towards making it a reality. Here’s what we wrote… In its first major step, the Vedanta-Foxconn JV has selected the state of Gujarat for its semiconductor project.
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