Adani and Zoho have withdrawn from semiconductor projects. Some have shown a premature concern about India’s Rs. 76000-crore worth of semiconductor incentive. It is a natural shake-out in a nascent sector. In fact, Adani and Zoho projects did not reach even the approval stage, since one of the conditions for approval is the critical tie-up with global technology partners, and they were unable to sew up this partnership.
On the ground, the circumstances are encouraging. Semi-conductor projects worth Rs. 1.5 lac crore of five companies have been approved and are progressing satisfactorily. The government has allocated Rs.60000 crore from the incentive scheme. These projects range over the entire value chain of semi-conductors — chip design, fabrication to assembly, testing, making, packaging and signaling. Critics expect a domestic demand to become successful, but smartphones in India under PLI scheme have succeeded in exports and have limited demand to begin with domestically. India has scaled up iPhone production from zero to 20 per cent of global output in four years. Most production is for exports. Apple is upbeat about Indian chips too.
The Government encourages production of electronics. It will take up software design as the next priority. It will facilitate both forward and backward integration.
Semiconductors are not just required in smartphones. They are required in power sector, automotive sector, defence, aviation, industrial electronics and consumer electronics.
Semiconductor dream remains firm on ground.
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