By: Narvijay Yadav
A lawyer friend of mine had booked his favourite car during the Diwali festival, but far from the delivery of the car, till now he has not yet got a proper response from the distributor as to when the car will be available. This is the condition of almost every car company these days. There is a demand for cars in the market, but there is no in time delivery. Not only cars, this is also the case with most electronics items. These include many types of electronic products like TVs, computers, laptops, smartphones, video game consoles, etc. Semiconductor chips are used in the manufacture of all these, which have a huge shortage. Not only in India, this is the situation in the whole world. Although China has so far topped in making electronics goods, now the dice is about to turn. Under an ambitious plan, the Central government has started making India a hub of electronics. If this happens, many employment opportunities will also be created for thousands of capable youth of our country. On Wednesday, the Union Cabinet approved an incentive scheme related to the production of semiconductor chips in the country itself.
It is worth mentioning here that the shortage of microchips or semiconductors due to the Covid epidemic is affecting industrial production around the world. Now a complete eco system for manufacturing semiconductors will be established in the country itself. Rs 76,000 crore will be spent on this project in the next 6 years. In this scheme, there will be a provision of 25 per cent incentive on the amount spent on setting up a unit of Compound Semiconductor Wafer Fabrication, assembly, testing and packaging facility. The scheme also includes incentives for start-ups for the design and development of semiconductors. The government expects big companies like MediaTek, Intel, Qualcomm and Texas Instruments to be interested in the project. This policy comes at a time when the world is facing a serious shortage of semiconductor chips. These chips are used in industrial production of devices. The supply of chips was disrupted due to the pandemic, because of which the production centres were gradually closed.
Big car companies in India are in a dilemma. Since the problem is long lasting and there is no immediate solution, Tata Motors has decided to manufacture the chips on its own. The company will set up an outsourced semiconductor assembly and testing plant for this. In such plants, silicon wafers are converted into chips. This plant can be set up in Tamil Nadu, Karnataka or Telangana, although the final decision regarding this will be taken only after getting the consent of the state governments. The Tata group can invest up to Rs 2200 crore for this purpose. Cars wholesale declined by 27 per cent in the month of October, which is 16.7 per cent lower than the pre-Covid, October 2019 sales. That is, less cars are now sold than the number of cars sold during the Covid period. The situation was even worse in September last, when wholesale sales declined by 41.16 per cent year-on-year and nearly 26 per cent lower than in September 2019. India is already on the path of progress in smartphone production, there will be further progress now. (The author is a senior journalist and columnist & can be reached at [email protected])