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Government will give $1 billion to chip-makers manufacturing in India

Abid Iqbal Shaik
·2-min read


Government will give $1 billion to chip-makers manufacturing in India
Government will give $1 billion to chip-makers manufacturing in India

02 Apr 2021: Government will give $1 billion to chip-makers manufacturing in India

The government of India will offer more than $1 billion in cash to every company that sets up a semiconductor manufacturing unit in the country.

The news was revealed by two Indian government officials to Reuters.

Both the sources have requested to stay anonymous, reports the publication. One of the two officials is a senior government employee.

Make in India: Indian government promises to buy chips from local manufacturers

According to these officials, the Indian government has assured the manufacturing companies that the government will buy the chips from them. In addition, the government claims that there would also be clients in the private market that would like to buy locally-made chips.

However, the government hasn't decided how to disburse the amount to the chip manufacturers, says one of the sources.

Self-reliant: India aims to cut its dependency on China for electronics

Notably, there are currently two major semiconductor manufacturers in the world, Taiwan Semiconductor Manufacturing Company and Samsung. So, essentially, the world is either dependent on China or Taiwan.

Tensions between China and India have been growing recently, which is why India wants to cut its dependency on China.

The Indian government is therefore encouraging companies across the globe to establish manufacturing units in India.

Global issue: Semiconductor shortage has hit automotive and electronics industry badly

In fact, automotive manufactures are not able to get enough semiconductors for electronic units, such as ECU and infotainment systems, in their cars. Many car companies had to halt their production lines due to the shortage.

PC parts have been out of stock at many places due to the semiconductor shortage. This issue has also inflated the prices of electronic items around the globe.

Chip shortage: Countries across globe are subsidizing chip-manufacturing companies

People have been working from home during the pandemic. This has resulted in a sharp rise in the demand for computers.

To solve this issue, many countries are encouraging chip manufacturers to set up new fabrication units in their regions by offering a subsidy, mostly in the form of tax rebates.