The government may set up a task force to tackle semiconductor shortage.
The task force will also suggest incentives to be given for companies to set up semiconductor plants in India according to a report by CNBC Awaaz.
Earlier in August Finance Minister Nirmala Sitharaman had said the industry needs to bring chip manufacturing to India in the wake of the global semiconductor shortage. Addressing the CII Annual Meeting 2021, FM Sitharaman noted that the industry needs to focus on the Atma Nirbhar Bharat scheme for its energy needs.
Reports suggest that the semiconductor shortage might begin easing from January 2022.
The chip shortage has been looming large for a while now. The pandemic was not the sole cause of the chip shortage. It only added pressure to a pre-existing issue. Industry experts highlighted the risk of a chip shortage, partly due to a lack of 200mm manufacturing equipment, back in February 2020.
A McKinsey report showed that demand for semiconductor sales from wireless communication was up 6% in 2020 and 11% in the case of personal computers. That surge is understandable given the pandemic and the large proportion of the world's working population working from home.
Early signs of fluctuating demand led to stockpiling and advance ordering of chips by some tech firms, which left others struggling to acquire the components.
Today, semiconductors are used in a wide range of electronic devices, including cars, laptops, smartphones and household appliances. As a result, many products are in short supply. And right now, there just aren't enough of them to meet industry demand. Many corporations across industries have said that production and sales will be impacted due to the shortage of chips.
It has become almost impossible to buy a PS5 games console. Toyota, Ford and Volvo have had to either slow or temporarily halt production at their factories. Smartphone makers are feeling the pinch too, with Apple warning that the shortage could affect iPhone sales.