Last month, Chief Minister M.K. Stalin made a pitch to electronics giant Samsung Electronics Co. Ltd. for opening a semiconductor manufacturing unit in Tamil Nadu and assured the company of support. With the Union government rolling out a ₹76,000-crore incentive scheme to promote domestic semiconductor manufacturing and prospective companies showing interest, the moot question is can Tamil Nadu grab this opportunity?
Industry representatives point to the measures needed from the Central and State governments for semiconductor manufacturing to become a reality. “The two broad aspects of chip system domain are chip designing and chip manufacturing. Although India has made some progress in creating a home-grown semiconductor design ecosystem, it lacks fabrication facilities that could manufacture chips locally,” said Neeraj Bansal, partner and COO-India Global; National Leader-Supply Chain Re-alignment, KPMG in India. India’s initiatives in the past to establish fabrication units failed owing to roadblocks, including the huge set-up cost, he said.
According to industry estimates, setting up a fabrication unit would need an investment of $3 billion-$7 billion. Industry representatives said the idea of the Union government is to bring in at least 2-3 fabrication units. “Besides front-end chip manufacturing, there is back-end manufacturing, which is assembly and testing. These facilities can be set up with an investment of $100 million-$300 million,” said Ar Rm Arun, president, Southern India Chamber of Commerce (SICCI).
