Why is it Important for India to Focus on Chip Design rather than Manufacturing?

Published  April 25, 2022   0
S Staff

In spite of being surrounded by various challenges, chip manufacturing in India is equipped with both strategic as well as practical benefits in the present scenario

Backed by nine pillars, the government of India proclaimed the much important Digital India initiative back in 2014 where the center of attention was on subjects regarding e-governance, but the most important criteria was to strengthen the electronics manufacturing sector. Even though it has taken many years to boost the sector, things have now started moving towards a positive direction. In the meantime, when COVID-19 broke out all over the world, the importance of information technology augmented for every country. Now, if you put aside the economic or the financial revamp that appeared from the pandemic, the world has now started moving towards renewable energy and transportation like electric vehicles, which will also perk-up the demand for digital technology tools. 

In order to strengthen the Digital India scheme, the government of late has announced the much-awaited incentives of Rs 2.3 trillion in December 2021, which is also known as the India Semiconductor Mission(ISM). Mckinsey in its latest survey report has published that the overall semiconductors market would grow 6-8 percent a year for the next decade, even after a jump of 20 percent in 2020-21, highlighted by the Financial Express, To grab the benefits of the scheme, Indian business tycoon Vedanta formed a partnership with Foxconn, the contract manufacturing supplier of chip to many global companies like Apple. 

Amid all the positive vibes, experts think that it is not an easy task to become a leader in chip manufacturing. The incentives required from the authorities must be larger than all the commitments because China and South Korea have spent the most on this sector, but still failed to achieve a global leadership status. On the other hand, experts opine that apart from manufacturing India should focus more on Chip design because it already has a strong international presence, which is exactly done by Israel. A couple of years back, in the vertically integrated firms both Chip manufacturing and designs were done. 

Chip manufacturing in the country can also prove positive for a manufacturing cluster that involves assembly, counting the escalating volume of products that utilize semiconductors be it basic memory chips or advanced cutting-edge microprocessors. The evacuation or the diaspora in technology related areas maintains a sturdy relationship with India. For instance, Vinod Dham, who is now the founder Ind-US Venture Partners has played a pivotal role in the enhancement of Intel's Pentium microprocessors, which showcase an important advancement in the domain of chip design