Positive about India's semiconductor approach; its talent, chip incentives in right direction: Applied Materials

New Delhi: US semiconductor toolmaker Applied Materials is "positive" about India's semiconductor approach, as it sees multiple elements of domestic consumption, strategic thinking, and enabling policies come together, according to a senior company executive.

The semiconductor equipment maker is "eager and excited" about the prospects of large-scale chip manufacturing units coming up in the country, and is committed to enabling them with its support ecosystem and service capabilities in times to come, Srinivas Satya, Country President at Applied Materials India, told PTI. The comment assumes significance as India is wooing semiconductor and display manufacturers with USD 10 billion incentive scheme, making a determined push to position itself as a global powerhouse for electronics production.

Sophisticated chips are part of everyday life, used in mobile phones to refrigerators and cars to high-tech industries, so fostering local industry with carefully-crafted schemes and policy sweeteners can catapult India to the global league in semiconductor manufacturing. On Friday, IT Minister Ashwini Vaishnaw, on the sidelines of Semicon India 2023, had said that India's global semiconductor ambition is getting a "huge response" on every part of the value chain and had expressed confidence that the country will have at least 5 fabrication units (fabs) over the next 5-7 years, attracting multi-billion dollars in investments.

With over USD 25.7 billion in global revenue, Santa Clara, California-headquartered Applied Materials is a leading global semiconductor fabrication equipment supplier. Applied Materials' Satya said that a combination of factors such as domestic consumption, strategic thinking, and enabling policies have come together to position India as an exciting market. Last month, the semiconductor equipment maker announced its plans to invest USD 400 million over the next four years to build a collaborative engineering centre in Bengaluru. The centre will focus on the development and commercialisation of technologies for semiconductor manufacturing equipment. "...we are quite excited with what is happening in India. We are eager and hopeful that there will be large-scale manufacturing facilities set up here. We know what it takes, and we have seen it in many countries...it won't happen overnight...any factory takes one to three years for it to come up.

We are hopeful of seeing those things and as that comes up, and we will do our part," Satya said. He added: "It is not just market...there is the service capability as well, that we need to set up to...keeping those factories operational day in and day out at peak performance requires partners like us to be ready in the region to enable those factories to run." The company is "positive" about multiple factors coming together as India makes bold moves to position itself as a semiconductor powerhouse. Satya noted that the government is taking inputs and modifying things along the way when it comes to semiconductor plans and described it as heartening. "It is positive to see the policy. The ease of business here has substantially improved in the last 5-10 years.

Talent has come a long way although we still need a leap in talent, but all ingredients like domestic consumption, proliferation of semiconductors, the strategic thinking, the policy and the commitment seem to be there. So we are quite excited with what is happening in India," he said. With consumer electronics, mobile phones, automobiles, computers and IoT set to fuel demand for semiconductors globally, India has identified chip-making as a key priority area, hoping to attract investments from global biggies looking to diversify their operations outside of China. India hopes to play on the strength of its storied talent and skill base, vibrant market, and enabling policies to corner substantial chunks of new investments flowing into electronics and semiconductor production, and global value chains.

Last month, computer storage chip maker Micron announced it will set up its semiconductor assembly and test plant in Gujarat entailing a total investment of USD 2.75 billion (around Rs 22,540 crore). The total cost of the plant comprises USD 825 million (around Rs 6,760 crore) from Micron and the rest from the government in two phases. The government has maintained that the first 'Made in India' chip should be ready by December 2024 from Micron's facility, coming up in Gujarat. Other players too have evinced interest in setting up a semiconductor manufacturing base in India. In fact, after pulling the plug on their USD 19.5 billion semiconductor JV, Foxconn and Vedanta have now decided to apply for India chip-making incentives separately.

Foxconn has said it is working on plans to apply for incentives under the semiconductor and display fab programme, as the contract manufacturer pledged its commitment to India. The Taiwanese electronics manufacturing giant on Friday said it is optimistic about the direction of India's semiconductor roadmap, and asserted that Taiwan is and will be India's most trusted and reliable partner. "Let's do this together," Young Liu, Chairman of Foxconn, had said at SemiconIndia 2023. Vedanta Group too has made it clear that it remains committed to building India's first semiconductor and display fabs in Dholera Special Investment Region in Gujarat, and substantial progress has happened to tie up technology and equity partners in semiconductors.

Vedanta Group Chairman Anil Agarwal has said that the first phase of its semiconductor project will involve a USD 5 billion investment of the overall USD 20 billion outlay, and the venture will be ready with 'Made in India' chip in 2.5 years. Vedanta is talking to three companies to rope them in as technology partners for its mega plans entailing foundry, chip manufacturing, and packaging and design. "In 2.5 years, we will give you Vendata made in India chips," Agarwal promised this week