India wakes up to semiconductor fab opportunity

The Indian government has called upon technology companies and investors to show their interest in setting up a semiconductor fabrication plant.

It wants to garner enough interest to ensure that the country keeps up with the global demand of the semiconductor and chips markets.

And the government is so keen that, according to the Economic Times,  it has set up a group called The Empowered Committee which will invite a preliminary Expression of Interest (EoI) from potential companies.

The group has posted a notice which says the government is in the process of developing a policy framework to “provide preference for domestically produced electronics goods in government/government influenced procurement.”

India is seeking money from outside its borders, saying it will allow 100 percent foreign direct investment under the automatic route in fabs. It will also offer interested companies help to set up the fabs.

India hasn’t seen the same level of success in the semiconductor market as other global powers. Back in November, Gartner analyst Ganesh Ramamoorthy warned that the Indian semiconductor market was falling behind China and Taiwan, due to low take up of government initiatives and low incentives.

He said at the time that, in his view, India could enjoy a boost by teaming up with China, joining together to become a great power in the semiconductor manufacturing industry.

In April the India Semiconductor Association (ISA) boasted that the country’s chip sector, which focuses mainly in VLSI design, embedded software development and board design, would grow by around 17.3 per cent year-on-year from the $7.5 billion in 2010. It predicted that this will amount to earnings of  $8.8 billion in 2011 and $10.2 billion in 2012.

However, there were still some worries, with ISA president Poornima Shenoy saying that  the sector needed heavy investment from companies to help boost it further.

It seems the government is waking up to the opportunities in semiconductor manufacturing.