Indian Economy News

India, Singapore in pact to set up chip-making units here

Bengaluru: As India gets closer to setting up two semiconductor wafer fabrication plants, Singapore companies are looking at setting up manufacturing units here and tap into large engineering talent in the country.

To speed up such activity , India Electronics and Semiconductor Association (IESA) is signing a Memorandum of Understanding with Singapore Semiconductor Industry Association (SSIA) with an objective to establish and develop trade and technical cooperation between the electronics and semiconductor industries of both the countries.

"Earlier things were sporadic and ambiguous, but now the India government has come up with many schemes that can help Singapore companies decide how to go about things," Meenu Sarin, secretary, SSIA, told ET. "In March 2014, Ajay Kumar (joint secretary, Deity, Government of India) met all the stakeholders in Singapore to come and set up base in India. It is a mutual win-win for both of us."

The two FABs, which are being setup with an overall investment of over $10 billion, are the biggest component of the ESDM policy that was rolled out in 2012.

Singapore has just 1,300 VLSI engineers, which limits the companies in the country to grow. India, on the other hand, has a VLSI talent pool of over 20,000. "Singapore is a small country with a population of just 5.2 million. India has good skillset for VLSI design engineers and we want to get that talent resource from India," said Sarin.

IESA and SSIA also launched a joint report, prepared by EY, titled India-Singapore Electronic and Semiconductor Design and Manufacturing industry collaboration opportunities at the IESA's Vision Summit in Bangalore.

"Both Singapore and Indian markets are considered highly important markets in the global EDSM sector. There are emerging opportunities for Singapore companies to support the speed up of the semiconductor FABs setup in India and also the electronics products creations as the demand continues to grow manifold in India," said Ashok Chandak, chairman, IESA and senior director, NXP Semiconductors.

There is a large trade imbalance between India and Singapore at the moment, especially when it comes to the electronics industry . As per the IESA report, India imports $2.7-billion worth of electronics from Singapore at the moment, while exports only $0.3-billion worth of electronics. With the help of the collaboration between the two countries, the report suggests that India's electronic export to Singapore can grow at a rate of 18% per annum to touch $3 billion by 2025.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.