Karnataka semiconductor policy to change the face of electronics industry

Government of Karnataka by closely working with Indian Semiconductor Association (ISA) has announced semiconductor policy to promote and nurture chip-design and electronics engineering business in Karnataka, especially the SMEs and startups with great ideas. Karnataka is always a step ahead of other states in IT and semiconductor industry. Now this initiative is a major milestone, which will have some ripple effects on the whole Indian semiconductor and electronics industry.

The big initiative came two year ago when Government of India has announced India Semiconductor policy offering range of sops to semiconductor manufacturing. Now this policy from Karnataka is a booster dose to take it further. India Semiconductor Association has done a great job by working closely with Government of India and other state governments in formulating the policies. If other state government follows in announcing semiconductor policies, it will result in multiple growth. No impressive results seen in 2009 for India semiconductor policy, but there was a reason of global-recession and the semiconductor industry was badly hit. The surprise was, Indian semiconductor market not hit so badly by the recession; only its growth was curtailed.

The highlights of Karnataka semiconductor policy includes:
A fund of Rs 10 crores will be made available to the private companies covering up to 50% of their R& D expenses subject to a limit of Rs. 10 Lakhs per unit. Preference for fresh engineering graduates based on the projects they come up with.
Provide Rs. 25 Crore towards 26% contribution to the KITVEN IT fund for raising funds.
Financial assistance to firms filing IP.
Solar farms in districts such as Bijapur, Gulbarga, Raichur, and Bellary.
Providing 50% of the total cost of lab facilities at STPI to spur the growth of R&D in future technology without financial burden to budding entrepreneurs.
For big businesses, ATMP units will be encouraged with special incentives in the proposed 40 Square-km ITIR coming up near Bangalore International Airport, Devanahalli.

Karnataka semiconductor policy, a first such policy by any state government in India is well received by industry experts in this domain. The semiconductor-chip is key ingredient of any modern equipment/machine ranging from your car to computer to coffee maker. The tiny device, whose economic impact is highest compared to any other present technologies. US, Japan, and Europe all have experienced the impact followed by South Korea, Taiwan and China. When it comes to India, It's now the beginning. India has a potential to display capabilities as good as these above mentioned regions in semiconductor domain, provided the support from government is consistent and dynamic(due to highly flexible nature of semiconductor industry, the policies got to be reviewed quite often). The government and semiconductor industry can be compared to a plane and runway, where the plane is industry and the runway (and the airport) is government's support. However supersonic jet is the plane it needs a runway to takeoff and land. Due to no runways, our planes were flying in other regions with lot of runways and airports (out sourcing our design services to developed world). But now we have the growing local market, government support, talent and hundreds of engineering colleges. What is missing? Infrastructure! It's happening but at slow pace.

Very right time for startups in this exciting domain. This policy nurtures the young and fresh talents.

Here are the industry expert's comments:

Semiconductor industry writer Pradeep Chakraborty says, "Even a part of this policy is implemented, it will change the face of electronics industry"

Ashok Chandak, senior Director of NXP Semiconductor India says, "It's good to know government has started looking at semiconductor industry strategically. It's good to know government focusing on electronics design and manufacturing rather than a semiconductor fab".

National Semiconductor's Krishna Murthy says, "This is a great step in creating an environment to compete with China"

Texas Instruments' Dr. Bobby Mitra says " It is niche. It's good concept, it show the importance given to electronics and semiconductor industry"

One person who needs to be appreciated for pulling out industry resources to assist in formulating the semiconductor policy is the Chairman of Indian Semiconductor Association Mr. B.V. Naidu. He says, Karnataka semiconductor policy not only covers chips, it covers LCD displays, passive electronic components and any such major components of electronic design and manufacturing eco.