With a full-fledged state-of-the-art fab coming up in India, we will enter into the elite league of nations to have this facility: Ajay Kumar


Monday, October 07, 2013: Three cheers to the government for having given green signal to the setting up of semiconductor wafer fabrication facilities (fabs) in India. With a full-fledged, state-of-the-art fab coming to India, we will enter into the elite league of nations which have this facility. This is a landmark decision for the world of electronics itself. For it is difficult to think of India to be merely doing the fabrication of wafers and chips only. India already has a vibrant chip design industry, even though presently it is servicing the fables design companies located elsewhere. The fab will trigger growth of domestic fables companies for sure. Moreover, we have enough capital and entrepreneurs in the country to set up units downstream of the fab, which are much less capital and technology intensive.

Moreover, their competitiveness increases when these are located close to the input supply chain of semiconductors and final market. The fab was not the only major decision during the month. Cabinet also gave green signal to setting up of IT investment region (ITIR) near Hyderabad. This is the second ITIR approved by the government in the last few months. The first one in Bengaluru was approved a few months earlier. The ITIRs are expected to make both Bengaluru and Hyderabad bigger destinations of IT and electronics industries by stimulating investment in infrastructure and related facilities.

Besides, in-principle approval was also accorded to three new electronic manufacturing clusters (EMCs) in Bhiwadi (Rajasthan), Bhopal and Jabalpur. This takes the number of EMCs to six for which in-principle approvals have been granted. The promoters of these EMCs need to get their anchor clients, finalise their detailed project reports (DPRs) and come back to DeitY for final approval. Two things which these promoters may particularly consider while submitting their final DPRs: one, reliable power supply and two single window clearance for units located within the EMCs. Most electronic manufacturing units need continuous quality power. Promoters would do well to have at least two independent feeders of power into these EMCs. They should also get undertakings from the State government regarding ability to buy power from the central grid to avoid load shedding in scarce months.

Similarly, EMCs should ensure that the single window clearance as envisaged for national industrial manufacturing zones
should be made applicable to these EMCs. The EMC scheme clearly provides for the same. The State Governments should take the lead in empowering the CEOs of the EMCs with relevant power so that they are able to provide all clearances relating to land, power, water, sewerage, environment, building construction, etc. for units located within these EMCs. This business process change is as important, and maybe even more important to create the much needed electronics manufacturing ecosystem in the country.


Once again, kudos to the government for taking the semiconductor wafer fab projects forward. Now it is for the applicants to quickly respond and make this significant decision really historic.

Dr. Ajay Kumar is also the chief editor of DietY’s electronic e-newsletter from where this article has been extracted



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