New semiconductor policy to be announced soon


New semiconductor policy will be announced soon spelling out terms for high tech manufacturing including chips and components like memory controllers, hard drives and motherboards.After two failed attempts and more than a decade later, the government is now readying a third attempt to lure semiconductor manufacturing firms to India.
Last month, the Department of Information Technology called for ‘expression of interest’ from global and Indian companies for setting up semiconductor manufacturing units, also called ‘fabs’. The government is hopeful of at least two such fabs coming up. Each fabrication facility costs $4 billion to $ 6 billion.
Local electronics consumption is expected to touch $400 billion by 2020, which translates into a chip market of between $50 billion and $60 billion. “By 2020, our electronics import bill could be larger than the oil import bill,” says Ajay Chowdhry, chairman, HCL Infosystems. He chaired the taskforce that evaluated previous policies and recommended changes that will help lure chipmakers.
Over the last two years, chip consumption has increased 61.44 percent to $8.25 billion, as per an India Semiconductor Association and Frost & Sullivan study. Right now, India imports 95 per cent of its electronics with $45 billion worth of electronic goods imported in 2010. India adds value by way of design but that accounts for a more modest $2 billion.


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