Several companies from diverse industries have been forced to either shut or curtail production in response to the breakdown of supply chains from semiconductor shortage, and the government’s Rs 76,000 crore push to set up chip manufacturing capabilities across the country would give a boost to electronics production in the country, the Economic Survey<\/a> said Monday.
“The PLI and other schemes to boost semiconductors<\/a> will not only help domestic companies to overcome the challenges posed by COVID 19 but also assist them to become globally competitive, especially in chip making,” the survey has explained.
The Cabinet last month cleared a Rs 76,000-cr incentive scheme to set up semiconductor manufacturing capability in the country . Under this scheme, India will set up more than 20 semiconductor design, components manufacturing and display fabrication (fab) units over the next six years.
Citing from one of investment bank Goldman Sachs’ reports, the report says the supply chain disruptions last year in the semiconductor industry have spillovers in over 169 industries.
“The manufacturing of semiconductors requires large amounts of capital and has an average gestation period of 6-9 months. Moreover, it has a fairly long production cycle of about 18-20 weeks. Hence, any recovery from the supply chain disruptions will be a slow and costly affair,” the Goldman Sachs report says.
The report further stated that microchips and semiconductors account for about 4.7 per cent of value added by the automotive industry . With the delay in supply, the average lead time7 in the automobile industry for 2021 has been around 14 weeks globally. India has also experienced similar trends in the automobile sector.
Detailing the list of industries requiring the cips, the survey says, semiconductors are an integral part of modern technology used in automobiles and its components, electronic and medical devices<\/a>. “The comprehensive interventions being introduced by the government will aid in the establishment of an ecosystem that boosts semiconductor production in India”.
Highlighting the government’s efforts towards boosting electronic production the survey said, “World over, electronics is recognised as a ‘meta-resource’. Electronics industry<\/a> is the world's largest and fastest growing industry and is increasingly finding applications in all sectors of the economy”. Thus, the survey said, with its impact in developing infrastructure, raising productivity, increasing efficiency in delivery of services, and enabling social transformation, electronics production is accepted as a key enabler in the country’s economic development.
The survey has said according to the June 2021 Quarterly Revenue Recover (QRR) the smartphone PLI scheme has resulted in investment of Rs. 2,595 crore and production worth Rs.67,275 crore of which, 31 percent or Rs. 20,568 crore was exported.
<\/body>","next_sibling":[{"msid":89243714,"title":"IT exports drive 18.4% growth in India\u2019s services exports between April-Dec: Eco Survey","entity_type":"ARTICLE","link":"\/news\/it-exports-drive-18-4-growth-in-indias-services-exports-between-april-dec-economic-survey\/89243714","category_name":null,"category_name_seo":"telecomnews"}],"related_content":[],"msid":89244041,"entity_type":"ARTICLE","title":"Chip shortages hit local production: Economic survey","synopsis":"\u201cThe PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by COVID 19 but also assist them to become globally competitive, especially in chip making,\u201d the survey has explained.","titleseo":"telecomnews\/semiconductor-chip-shortage-forced-firms-to-curtail-production-eco-survey","status":"ACTIVE","authors":[],"analytics":{"comments":0,"views":767,"shares":0,"engagementtimems":1879000},"Alttitle":{"minfo":""},"artag":"PTI","artdate":"2022-01-31 15:08:28","lastupd":"2022-01-31 17:30:48","breadcrumbTags":["chip shortage","economic survey","devices","Semiconductor chip shortage","semiconductors","ashwini vaishnaw","Electronics industry"],"secinfo":{"seolocation":"telecomnews\/semiconductor-chip-shortage-forced-firms-to-curtail-production-eco-survey"}}" data-news_link="//www.iser-br.com/news/semiconductor-chip-shortage-forced-firms-to-curtail-production-eco-survey/89244041">