karnataka targets global semiconductor giants with new policy

2024-12-30 general

Bangalore, Monday, 30 December 2024.
Karnataka is making a bold move to attract major semiconductor investments by introducing a revised Electronics System Design and Manufacturing (ESDM) policy. This initiative aims to position the state as a key player in the global semiconductor industry. The policy is designed to lure giants like NVIDIA and TSMC to consider expanding their operations in India. The government has approved a substantial investment of ₹3,425.60 crore for an electronics manufacturing cluster in Mysuru, expected to create 460 jobs, among other projects. Despite past setbacks, such as losing a large investment to other states, Karnataka is determined to enhance its semiconductor capabilities. The state has earmarked 901 acres for industrial clusters and is willing to adjust policies to attract major players and their supply chains. This proactive approach highlights Karnataka’s ambition to become a semiconductor hub, leveraging Bengaluru’s existing dominance in chip design.

Investment momentum and industry growth

The Karnataka government has approved multiple investment proposals totaling ₹10,144.31 crore, projected to generate approximately 6,000 jobs [1][2]. A significant development includes Foxconn’s commitment of ₹1,200 crore, expected to create 40,000 direct jobs [1]. Bengaluru currently dominates India’s semiconductor design landscape, hosting 70% of the country’s chip designers and generating 80% of design revenues [1]. The state has strategically allocated 901 acres across four industrial clusters: Hubballi, Kochanahalli, Tumakuru, and Hosahalli [1].

Recent victories and competitive landscape

Karnataka’s aggressive strategy has yielded results, securing a major victory with Zoho Corp’s ₹3,450 crore investment for a silicon carbide unit in Mysuru [4]. This success came at Odisha’s expense, demonstrating Karnataka’s competitive edge in swift decision-making [4]. The state’s semiconductor push aligns with national progress, as evidenced by the Union Cabinet’s approval of three semiconductor units in early 2024 [5]. The global semiconductor market, valued at approximately ₹35 lakh crore in 2020, is expected to grow significantly [5].

Strategic expansion and workforce development

The state is expanding semiconductor facilities beyond Bengaluru to cities like Mysuru and Doddaballapur [1]. Industry leaders note the advantages of tier-2 cities, with Tessolve Semiconductor’s CEO highlighting lower attrition rates and high employee dedication in these locations [1][2]. This expansion coincides with Tata Group’s nationwide manufacturing push, which includes semiconductor facilities, aiming to create 500,000 manufacturing jobs over five years [6]. State IT Minister Priyank Kharge has emphasized flexibility in policy adaptation to attract major players [1].

Bronnen

Policy Investment