With about 125 players involved in some kind of semiconductor design in India, the announcement will spur the setting up of fabrication units, thus creating a much needed ecosystem. Echoing the sentiment, is Rajeev Mehtani, vice president and managing director, NXP Semiconductors India, "The policy is not expected to have a direct impact on the semiconductor design community in India. However it is understood that in creation of the entire ecosystem of design and manufacturing, more of our engineers will see their products through to manufacturing, thereby increasing the total capability of the engineering community."

	In itself the policy is not a very generous one. However, coupled with the fact that the Indian consumption patterns are expected to rise very fast, this policy will go a long way in helping develop a local manufacturing ecosystem.
	-Rajeev Mehtani, vice president and managing director, NXP Semiconductors India
	I am sure that the subsidies offered are less than what the current set of investors in the field had hoped for, but then now we have a defined status.
	-Atul Arora, president, Commercial Operations, ARM Embedded Technologies

The Reactions
Bob Kondamoori, managing partner of Sandalwood Partners, the key investor in SemIndia
The semiconductor policy is a great positive signal to investors like us. Our ardent wish is that the government should also follow up this policy formation by creating the right mechanism to implement it. With this, India will be in the global league and market sensitivity and operational diligence will be the imperatives for ensuring success of such high ticket projects.

Ganesh Guruswamy, country manager and director, Freescale Semiconductor
It is an important step in the development of the ecosystem. With India's electronic consumption and production set to grow at a rapid pace over the next few years, one can expect the incentives announced today to provide a much-needed fillip to domestic hi-tech manufacturing, which is of strategic significance in any industry. Growth in manufacturing in India will have a trickle down effect and benefit allied sectors and it is clear that the government is determined to attract investment. To accelerate growth the government needs to continue to focus by engaging with the semiconductor players to understand their immediate needs and address them to fuel future growth.

Jaswinder Ahuja, managing director, Cadence Design
The incentive package that the government has announced is relatively lower than what other countries have been offering to attract semiconductor manufacturing as a strategic national priority. I hope that the huge demand opportunity that India presents offsets this in the business plan analysis of prospective investors.

Rajeev Mehtani, vice president and managing director, NXP Semiconductors India
In itself, the policy is not a very generous one. However coupled with the fact that the Indian consumption patterns are expected to rise very fast, this policy will go a long way in helping develop a local manufacturing ecosystem. The government can go a long way in setting up dedicated semiconductor industry development boards. These boards would focus primarily on creating the infrastructure to allow test, assembly and manufacturing to operate effectively and efficiently, in active involvement in leading new technology development.

	Semiconductor requirement in India in 2015 will be to the tune of $40 bn-plus and if India could manufacture a large percentage of this in India, the total electronics equipments consumption would be about $350 bn
	Source: ISA – Frost & Sullivan 2006 report

Atul Arora, president, Commercial Operations, ARM Embedded Technologies
The Government of India has done the right thing in announcing a semiconductor policy. It takes the uncertainty out of the given situation, gives the potential investors guidelines along which they can now plan and execute. I am sure that the subsidies offered are less than what the current set of investors in the field had hoped for, but then now we have a defined status and I guess they will have to mix their cards again and talk to their financiers.

In the value chain of manufacturing, semiconductor manufacturing occupies a very high position. Semiconductor manufacturing requires "bleeding edge" equipment, highly qualified people and a constant investment in the newest technology and equipment if one wants to be an established player in the field.

Sudesh Prasad
sudeshp@cybermedia.co.in

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