what led to the semiconductor shortage?
Due to the pandemic-induced slowdown in the world economy, policymakers worldwide saw what serious issues could arise by depending on a sole manufacturing hub for the world economy, be it chips, automobiles, to pharma APIs; the tension due to manufacturing constraints was palpable. India has been pushing above its weight and is on the verge of setting up its semiconductor manufacturing ecosystem soon. The managing director of Sequoia Capital, Mr Rajan Anandan, has backed India’s potential to build its semiconductor manufacturing in the Indian ecosystem and become a top-tier chip design player.
Sequoia Capital’s Investment in Mindgrove’s Futuristic System-on-Chips (SoC)
During the Mint Zetwark Smart Manufacturing Summit 2023, the MD of Sequoia Capital vocalized the company’s investment in a deep tech start-up, Mindgrove. This start-up is focused on designing cost-effective and power-efficient Systems on Chips (SoC). SoC combines processor, GPU (Graphics Processing Unit), memory, USB controller, power management circuits, and wireless radios. The company aims to create new possibilities in the domain of futurist technologies and to enable technological progress.
India’s Potential in Semiconductor Manufacturing
Chip manufacturing is a colossal, capital-intensive business. Chip manufacturing requires a “fab” manufacturing plant, in which integrated circuits are drawn from raw silicon wafers. The setting up of fab manufacturing plants is a challenging task. India has become a fertile ground for both domestic and foreign investment. It is now possible to undertake such projects with profound strategic implications for the world economy and enable supply chain diversification. There is a noticeable rise in the risk appetite of the Indian companies that were missing earlier due to various factors that seem to be easing now and opening up new avenues for them to explore and shine in.
India’s talent in the technical design sector is top-notch, with multinationals from many countries having their design centres in India. Considering India’s dynamic performance in the design domain spanning various fields, the growth of the domestic semiconductor industry is poised to rise to another level. Another factor leading to the enthusiasm regarding supply chain diversification is the diminished raw material and product availability after the first wave of the COVID-19 strike on a global scale. According to the research, 20% of worldwide design engineers hail from India.
Moreover, India has a vast pool of talented software developers hailing from various educational institutes and making their names in IT hub cities like Gurgaon, Hyderabad, Bengaluru, Chennai, etc.
There is a profound shortage in the supplies of semiconductors in the wake of COVID-19. The virus has affected a spectrum of industries, including automobiles and electronics. In the era of Chinese manufacturing dominating the world economy, finding alternatives is the best option at the outset. Complementing the global manufacturing behemoths with newer alternatives is a novel measure to prevent putting eggs in one basket and ensure build upon experiences gained during times of crisis that braced past humanity. Building upon the positives, and making due changes as time demands, will lead to catapulting India into a whole new trajectory within two to three decades. India can be amongst the zenith semiconductor manufacturers with its aspirational talent, a speedily developing manufacturing ecosystem, and rapidly flourishing first-generation start-ups.
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