India awaits first investment in semiconductor space

Even as the government is planning yet another package to attract investments into setting up semiconductor fabrication units in India, global tech giants are making billion-dollar investments in the US. While China has been the hub of semiconductor manufacturing, the geopolitical situation is forcing tech companies to look at other countries. On Wednesday, Korean major Samsung announced that it would build a new semiconductor manufacturing facility in Taylor, Texas. The estimated $17 billion investment in the United States will help boost production of advanced logic semiconductor solutions that power next-generation innovations and technologies.

“As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Kinam Kim, Vice Chairman and CEO, Samsung Electronics Device Solutions Division. “With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.”

Location chosen based on multiple factors
After reviewing multiple locations within the U.S. for a potential manufacturing site, the decision to invest in Taylor was based on multiple factors, including the local semiconductor ecosystem, infrastructure stability, local government support and community development opportunities. In particular, the proximity to Samsung’s current manufacturing site in Austin, about 25 kilometers southwest of Taylor, allows the two locations to share the necessary infrastructure and resources.

In September, Intel announced that it will spend $20 billion to build two new chip factories, called fabs, in Chandler, Arizona.

The semiconductor is the heart of any electronic product and getting a global player to start manufacturing it in India will be the key to the Make in India vision. Currently, India imports almost all semiconductors to meet local demand. But the recent shortage of chipsets has impacted multiple sectors including auto, consumer durables and electronics. So far, incentive packages for setting up semiconductor fabrication units in the country have had no takers. Though two consortiums had submitted proposals to establish fabrication units both remain on paper. Only the Tata Group has announced that it is looking to enter semiconductor manufacturing as part of its plans to ramp up its presence in the electronics space. The Hindu BusinessLine