BT Budget Roundtable: Semiconductors important for India’s future, says IT Minister Ashwini Vaishnaw

Semiconductor is one subject, which is very important for the country’s future, said Minister of Electronics and IT Ashwini Vaishnaw while speaking at Business Today’s Budget 2023 Roundtable. India announced its semiconductor policy on January 1, 2022, with a financial outlay of Rs 76,000 crores for not just setting up the wafer and display fabs but building a semiconductor ecosystem.

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Reiterating the importance of semiconductors, minister Vaishnaw said: “Electronics manufacturing was practically negligible ten years back. It is close to $87 billion of electronics manufacturing happening in the country and the recent budget, whatever relief has been given on the BCD (Basic Custom Duty) for some components, which is going to further increase the growth of mobile manufacturing in the country. We are almost reaching $9 billion in exports of mobile phones this year.”

As the government has already completed a year since the scheme was announced, minister Vaishnaw said that the decision will be announced in 14-16 months from the date of the announcement. However, he shared some progress, “There is a very strong, very positive reaction by semiconductor majors for India. And that's because of three things. First, we have a very good talent base here. Second, for the entire ecosystem which is required for semiconductors, the government has contacted each and every of those ecosystem participants; they are willing to come here, and they have committed to come here. Third, a very good long-term plan, which is there for ten years. Our plan is for ten years.” The minister said India will be witnessing some real (semiconductor) majors coming to India in the coming months.

Nanometer game

As the leading semiconductor companies are moving towards 3nanometer chips soon, even the higher nodes are in very much demand. Minister Vaishnaw clarified this myth, “If you look at the way the semiconductor industry is evolving and this is a development of last for five years, today almost 50-52% of the total semiconductor market is in three sectors - electric vehicles, telecom equipment and power electronics. These are the three sectors in which semiconductors are having more than 50% of the demand today, and what are these sectors requiring these sectors require higher voltage because they have to carry more current. All these applications require semiconductors in the range of 35, 45, 60 nanometres. So the entire world today is actually rebalancing their semiconductor manufacturing and getting more and more towards the higher nodes because that is where the demand is. Even the US-Chips act has a special provision for the higher nodes because everybody can see the future of the telecom, the telecom revolution of 5G.”

The global semiconductor industry is poised for a decade of growth and is projected to become a trillion-dollar industry by 2030.