“India has a great opportunity to create all the enablers that can make the semiconductor industry successful in the next five to 20 years,” said Bhatia.
US chip giant Micron, which is investing up to $825 million to set up a semiconductor chip assembly and testing plant in India, said policy certainty is crucial for the industry to thrive.
Manish Bhatia, Executive Vice President, Global Operations, Micron said policy stability is a huge driving factor in attracting companies to India and creating an ecosystem for the export market.
“Policy certainty is one of the advantages that India has over many other developing countries that are vying for some of these large investments in the manufacturing sector. This helps create an export-friendly market not only for our manufacturers, but also for others in the value chain such as suppliers, customers, suppliers of specialty materials, specialty chemical services, technical support and design services, etc.” , said Bhatia. He was speaking at the Nasscom Technology Leadership Forum.
He added that this policy predictability is needed not only for the next five years, but also for the next 25 years, as semiconductors are a capital-intensive industry that will only show returns in 15 to 20 years.
“Our suppliers are also very similar and capital intensive. The return on these investments will only be visible after 15-20 years and that is why policy certainty is important. That is what happened in countries like Taiwan, South Korea and Japan,” he added.
He added that the semiconductor industry has reached $500 billion in the past sixty years and the next $500 billion market could be reached in the next five years.
“India has a huge opportunity to create all the enablers that can make the semiconductor industry successful in the next five to 20 years,” said Bhatia.
He also said that apart from certainty on policy, there needs to be coordination among all stakeholders, be it government – central or state – and educational institutions, to come together in a focused manner.
When it comes to the challenges associated with setting up such a large semiconductor, Bhatia said infrastructure also needs to be developed. “The production of semiconductors is very complex; even a split second of power fluctuations can put millions of dollars at risk. This is similar to water and waste management infrastructure, logistics…” he added.
Bhatia confirmed that Micron will begin production at its Sanand plant early next year. The company assembles and tests its advanced D-RAM and NAND products.
“This facility caters not only to the Indian market but also to global markets. We want to export from here. These products will have to meet the standards of all our local customers, whether in smartphones, cloud computing or automotive. India will have to meet those standards,” said Bhatia.
Micron is investing the $825 million in the two phases of the project and will create up to 5,000 new direct Micron jobs and 15,000 community jobs over the coming years. Under the government’s Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme, Micron will receive 50 percent fiscal support towards the total project cost from the Indian central government and incentives representing 20 percent of the total project cost from the state. of Gujarat.
The combined investment from Micron and the two government agencies over the course of both phases will amount to $2.75 billion. Government support will help finance the project and facilitate access to essential semiconductor infrastructure and resources to drive innovation and enhance the development of local talent.
First print: February 21, 2024 | 5:51 PM IST