Red carpet for chipmakers

The Centre’s Rs 76,000-crore mega plan to incentivise semiconductor manufacturing comes at an opportune time as automakers and tech companies around the world grapple with chip shortage — a result of the pandemic’s after-effects on increased demand for data and consumer electronics, as also tense Washington-Beijing ties. It also marks a determined push to move the country up the electronics value chain as companies look to diversify their manufacturing bases beyond China. Now the second-biggest smartphone maker behind China, India aims to carry forward the momentum for development of a semiconductor and display ecosystem, as it woos some of the world’s largest electronics manufacturers to set up shop and give the domestic industry a fillip. Yet, the odds are many.

The backbone for any electronic device to operate, semiconductors are among the top traded products globally. Making chips, however, is a complicated and arduous process. It takes a lot of time and effort, along with huge investment, to build fabrication facilities. Even then, success is not guaranteed in the face of intense competition. China has called chip independence a top national priority, but for India, self-sufficiency can only be a long-term target. Sustained support and prioritisation among the several chip-making processes would be vital as it embarks on a much-delayed endeavour.

The Modi government’s welcome initiative is bound to help cut expensive imports and introduce advanced technology in the long run, hopefully triggering the much-needed impetus for consolidation of big tech in the country. The ambitious roadmap though must factor in a pragmatic assessment of the capabilities and possibilities. The proposal to support 100 local firms working on integrated circuit and chipset designs could well be the beginning that can lead to setting sights on loftier goals, amid a race among countries to become self-reliant in making chips and reshaping supply chains.