India Favourite As The Next Chip Manufacturing Destination

India has been touted as the next favourite destination for semiconductor manufacturing at a global electronics body conference.

Tata Technologies CEO Rajan Manickam presented India as an alternative destination for semiconductor manufacturers wary about potential geopolitical and natural disaster risk in other parts of Asia.

Tata Technologies is the outsourced semiconductor assembly and test (OSAT) arm of Tata Electronics. The OSAT vendors supply third-party integrated circuit-packaging and test services.

Manickam touted India, alongside Southeast Asia, as a destination for chipmakers, citing its attractive location with easy access to land and sea transportation, reports Nikkei Asia.

"It's always location, location and location," Raja was quoted as saying in a semiconductor conference organised by the SEMI industry association in Penang, an island state in Malaysia.

At present, the semiconductor manufacturing is carried out largely in parts of Asia prone to "geopolitical" worries and "natural disasters", the Tata Technologies CEO said, apparently referring to Taiwan and South Korea, the leading chip players in the region but face concerns over tensions with China and North Korea.

Further, China's semiconductor manufacturing ambitions are facing uncertainties amid economic and security issues with the US.

Meanwhile, Japan, another major player, and Taiwan suffer frequent earthquakes.

Raja's remarks came as Prime Minister Narendra Modi led Indian government has already announced a $10 billion incentive programme to develop a semiconductor ecosystem in the country.

"The government has done its part and the respective states are also competing with their own incentive packages," Raja said, adding that "It is on the part of the Indian private sector to step up".

He also emphasised that investment by global semiconductor players in India will not only help the country but will also benefit the chip industry as the Indian market could help it achieve its desired $1 trillion market size.

lneeds the investment from global semiconductor players bRaja also said that while India needs the global semiconductor industry to invest there, the sector will also need the country of 1.3 billion people to achieve its desired $1 trillion market size.

"Many big semiconductor [companies] have research and development based in India, so it's only logical for the research centers to be surrounded by manufacturing plants," he said.

The Tata Technologies CEO highlighted that India has a large workforce with "deep and scalable engineering talents".

He adde that the huge population of young people also offers a massive end-user market.