Will Gujarat pave a way for India's semiconductor dream ?

With the announcement of establishment of semi- conductor industry by Vedanta-Foxconn which is a USD 20 Billion joint venture in the state of Gujarat, India has embarked itself in a journey to become a major global player in semiconductor market. India's semi conductor market is expected to reach USD 63 Billion by 2026 from USD 15 Billion in 2020. Keeping that in mind, Government has devised policies to keep the pace to achieve that, for example, Indian semiconductor mission announced in 2021 which aims to build a vibrant semiconductor and display ecosystem to enable India's emergence as a global hub for electronics manufacturing and design. Speaking of electronics, India imported USD 847 Million in FY 2021-22(till May) of electronic import which has negatively India's fiscal health. As India will begin to produce semi-conductor domestically, it will significantly bring down the prices of electronics items from mobile phones to refrigerators to laptops and cars. 
But setting up a semi conductor facility in India will have its own sets of challenges ranging from procurement of raw materials to specialty chemicals to manufacturing equipment. Moreover, semiconductor industry is a capital intensive as well as  technologically intensive industry. As mentioned earlier, Indian Semiconductor mission will revolve around setting up semiconductor wafer fabrication facilities and display fabs in India which requires an heavy amount of investments but Government has allocated only INR 76,000 crore for supporting the development of semiconductor and display manufacturing ecosystem. India also has only one old fabrication facility in Mohali, Punjab. 
So in order to become a powerhouse in semiconductors, India needs to invest heavily on setting up new fab manufacturing. Also, Indian Public Enterprises like Bharat Electronics Limited and Hindustan Aeronautics Limited can set up semiconductor fabs with the help of a global major. As semiconductors are heart of modern information age it is paramount to take a lead in it.   semi-conductor.jpg       


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