Centre plans 'crucial decision' on fabrication facility by year-end

The Centre will take a ''crucial decision'' to set up a semiconductor fabrication plant (known as  fab) by the end of 2012 to meet the gap between domestic demand and supply of electronic products in the country.

This was disclosed by the Minister of State for Communications & IT, Sachin Pilot, on Monday, at the Indian Semiconductor Association (ISA) Vision Summit here. 

A fab is a semiconductor factory where devices like integrated circuits (ICs) are manufactured. “It’s time that we give everyone a specific deadline for the decision of the project as I have been facing questions even when I was at the World Economic Forum, Davos,” Pilot said. He said that according to estimates, In the coming years, India would have around 165 million households of middle income, meaning that India’s purchasing power and demand will subsequently increase. “The domestic demand for electronics would be $400 billion by 2020 and the supply for such products would comprise only about $100 billion by 2020,” Pilot added.

The minister said that though the last two decades have been overshadowed by the success stories of software, BPOs and other such industries, the government is keen to bring forth a surge in the electronics industry too. “Though the electronics industry in India is in a better position than before, it only contributes 3.5 per cent to this industry worldwide,” said Videocon Industries Limited Group President Pradeep N Dhoot. Dhoot explained that what India lacks are proper manufacturing units as we are largely dependent on China and Finland for goods and components. The only way to progress, he said, would be for India to bring its own manufacturing units into place.

“For this, the government and the private sector should join hands in developing the required facilities,” Dhoot added. Pilot added that this initiative of fab is to make sure that India has better chip manufacturing foothold in the world and also said that when we say manufacturing, we must do commendable amount of value addition to the product. The government had, in June 2011, invited expression of interest from technology providers and investors to set up a fab plant in the country as it saw a growing demand in this industry.