What’s more, the largest chunk is in the semiconductor segment thanks to IGSS Ventures’ `25,600 crore proposal. Currently 20% of India’s electronics manufacturing<\/a> is in Tamil Nadu in sectors such as mobile phones, consumer electronics<\/a> and computer hardware and peripherals (where TN has a 40% share). The state is targeting more investments in these segments.
State industries secretary S Krishnan says, \"We have an electronic hardware policy that has increased investments mostly at the level of local assembly (Flex, Foxconn, Salcomp). Our strategy is to move to the next level of making components here and we’re looking at three hubs for this -- the Chennai-Sriperumbudur-Vallam-Vadagal auto cluster; the Hosur-Krishnagiri cluster from where Tata Electronics<\/a> has already started manufacturing; and the Coimbatore belt.\"
The state’s electronics investment strategy, he adds, rides on its skilled manpower advantage. \"We’re talking to players for assembly, testing and packaging units in the semiconductor industry as well,\" says Krishnan. \"Our focus is to move further upstream to designing electronics components where we have an edge due to our higher education and institutional strength. Human resource is our big plus and our R&D policy is intended to attract more design-oriented units to come to Tamil Nadu.\"
This focus on manpower muscle has the industry’s blessings and could be a USP for TN. Krishna Moorthy K, CEO & president, India Electronics & Semiconductor Association (IESA), says, \"Due to the allegiance the people of Tamil Nadu have to their home state, attrition levels are one of the lowest in the country. This is a big plus when many bigger electronics system design and manufacturing (ESDM) companies at other locations are grappling with very high attrition issues.\"
Electronics is one of the 11 sunrise sectors chosen by the state government for value-add investments. \"In electronics we are targeting all the sub-verticals such as mobile and telecom, computer hardware and peripherals, and consumer electronics. This has become imperative as mechanical products become more electronics driven. Otherwise, TN will lose its manufacturing edge,\" says Pooja Kulkarni, CEO, Guidance Tamil Nadu.
What has helped, she says, is that the Government of India has also come up with PLIs in all these sectors and Tamil Nadu is seeing \"a lot of traction in all three\". For instance, Voltas is putting up a compressor and AC plant while Samsung<\/a> is putting up a compressor plant for its refrigerators. \"We are seeing backward integration beyond product assembly with companies now making the components here,\" she says.
That value-add ties in neatly with TN’s manufacturing footprint. For instance, the electronics focus feeds into Tamil Nadu’s automotive industry. \"We’re an auto hub and this helps in moving up the value chain in electronics as well,\" adds Krishnan.
This mechanical to electronics integration is ready to spill over into technology startups as well. \"Our technology epicentre will focus directly on all aspects of mobility and, as we go forward, automobiles will have a lot more electronics. So we will incubate electronics startups too, \"says Satyakam Arya, MD & CEO of Daimler India Commercial Vehicles, which recently tied up with IIT Madras Incubation Cell to jointly mentor and support mobility startups.
\"Startups and MSMEs in Coimbatore and Hosur belts are already developing solutions and products that electric vehicles will ride on in near future,\" says IESA’s Krishna Moorthy.
A recent IESA study says TN is one of the top three states, along with Karnataka and Maharashtra, in electronics. Another global study by FDi Intelligence ranked Chennai as the second most competitive location to set up an electronics R&D centre after South Korea’s Seoul. Chennai was ranked higher than Chinese cities Guangzhou and Shenzhen, which were in third and fourth spots. In terms of affordability, Chennai topped the table followed by Malaysia’s Penang, Gurgaon and Pune.
Tamil Nadu is clearly doing a lot of things right, but it needs to do a bit more. \"The state needs to showcase its prowess better to the global audience and set up more global captive design centres to attract leading design companies,\" says Krishna Moorthy.
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