TN to release Semiconductor and Advanced Electronics Policy at GIM

Chennai: The third edition of the Global Investors’ Meet to be held here on January 7 and 8 will witness the launch of Tamil Nadu Semiconductor and Advanced Electronics Policy besides major investments in several sectors, as the state makes a concerted effort to move up the value chain in electronics manufacturing.

Chief Minister M K Stalin will launch the policy that will focus on garnering investments from firms that are involved in advanced design and high-end electronics manufacturing by offering them incentives and structured packages.

The high-profile event will see the participation of economist and former governor of Reserve Bank of India Raghuram Rajan, former Chief Economic Advisor Arvind Subramanian, celebrated author Chris Miller, business tycoon Anand Mahindra, First Solar CEO Mark Widmar, and Coursera CEO Jeff Magioncalda among others.

The policy, officials believe, is the need of the hour as Tamil Nadu wants to move up the value chain in the sector from electronics manufacturing services (EMS) to high-value jobs in component and semiconductor design.

“We are already on the top in EMS with three contract manufacturers of Apple Inc, Foxconn, Pegatron, and Tata Electronics Private Limited functioning from the state. Ideally, we should attract investments in electronics design and from firms that do value addition in the sector,” a senior government functionary told DH.

The state, the functionary said, will have a slight advantage in attracting investments in the semiconductor sector due to the presence of companies like Qualcomm and KLA in Tamil Nadu. The policy will set a goal for the state in the advanced electronics sector besides focusing on incentives and packages to companies that invest in the state.

The state wants to play on both of its human resources strength in attracting investments in electronics and electronics design, the government functionary said. While EMS brings in more jobs, though low paying, electronics design will provide high-paying jobs to highly-skilled individuals.

The move to release a specific policy – the state has exclusive policies for electric vehicles, non-leather footwear, and electronics – comes amid another major technology firm Cisco is set to launch production in Tamil Nadu for domestic and export markets.

In the past few years, Tamil Nadu has played host to two of Apple Inc’s key suppliers, Foxconn and Pegatron, and home-grown Tata Electronics Private Limited and Taiwan’s Delta Electronics making it one of the key destinations for investments in the sector.

Foxconn is also venturing into high-end component manufacturing by investing Rs 1,600 crore. The company, according to sources, is in talks with a private industrial park in Oragadam in Kanchipuram district to set up its facility.

With ramping up and launch of production by Foxconn, Pegatron, and TEPL in the past year, Tamil Nadu piped Uttar Pradesh, Karnataka, and Maharashtra to clinch the no. 1 slot in in the country in electronics exports in 2022-2023 fiscal at $5.37 billion. In the period between April and October 2023, the state’s electronics exports stood at $4.8 billion, which is almost double that of Uttar Pradesh, which is a distant second at $2.5 billion.

The huge jump in electronics exports is credited to ramping up production by contract manufacturers of Apple, which began assembling its flagship phones in 2023 around the same time they were manufactured in China, the company’s largest manufacturing hub.