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.
