INSUBCONTINENT EXCLUSIVE:
India should aim to staff not just its own plants, but also to fill manpower requirements
Image: Bloomberg4 min read Last Updated : Sep 16 2024 | 6:47 AM ISTBy Mihir SharmaAcross the world, countries are spending wagonloads of
taxpayer money to develop or support their semiconductor industries
This pipeline of cash has yielded some successes and some failures; the difference is usually down to how strategically the money has been
Modi, federal budgets have generally been pretty stingy with subsidies
But $11 billion has already been set aside, and largely allocated, to various chip-related projects
plans for labor-intensive sectors such as leather goods
According to officials, when various funds from state and federal sources are added up, three-fourths of the capital cost of a new
They seem to have multiple objectives, and that always leads to a bit of mess when it comes to designing policy.
Is the goal to increase
substituting imports overall? Do officials think domestic production is essential to support the creation of a broader electronics sector,
or to provide supply-chain resilience to the growing automobile sector?
What they say in public is troubling
Not even the US can really aspire to true semiconductor self-sufficiency, given the complexity of chip supply chains
on chip imports, as long as a significant proportion come from friendly sources such as South Korea, Taiwan, or the West
the spots in the supply chain where India can enter quickly and scale up effectively
Some companies interested in manufacturing in India may have given up because it seemed too tough to secure a reliable supply of ultra-pure
The private sector needs to be given a freer hand in identifying the right locations for its investments
some of these questions first
They also need to work harder on an unexpected problem: getting the right workers
But quality control in higher education is so poor that new plants will struggle to recruit a workforce.
Officials are at least aware that
one of the biggest bottlenecks is the availability of engineers
If their plans are to come to fruition, they estimate they need between 10,000 and 13,000 trained workers by 2027
Some private forecasts of the talent shortfall are much higher.
Restructuring academia to focus on research and training will pay
only place where money is made in the chip supply chain
up and government support for design has been increased
But more could be done if New Delhi spends its money rationally
The real bang for its buck will come through investing in those sections of the supply chain where India may have a comparative
advantage.
Fabs can follow once an ecosystem develops
Bloomberg Opinion piece, and these are the personal opinions of the writer
They do not reflect the views of www.business-standard.com or the Business Standard newspaperFirst Published: Sep 16 2024 | 6:47 AMIST
