Semiconductor shortage a big opportunity for local auto component firms: SIAM chief.


The current semiconductor scarcity is a major concern for the automotive industry, but it may also present a significant opportunity for the domestic auto component manufacturing business, according to SIAM President Kenichi Ayukawa.

Ayukawa, who is also the Managing Director and CEO of Maruti Suzuki India, spoke at the Automotive Component Manufacturers Association of India (ACMA) annual session, saying that demand for technology-based equipment has expanded significantly in other industries alongside the automotive market.

“The challenge of COVID-19 continues globally. Different regions are being impacted at different times. While the global supply chain is already very complex, such disruptions and uncertainties further add to the challenge. Hence our preparation has to keep pace with the growing challenges,” Ayukawa noted.

The global semiconductor supply chain has become increasingly vulnerable as a result of numerous causes, he said, and it has had an influence on the domestic car sector since last year and continues to be a significant concern.

“While the semiconductor shortage appears to be a challenge, it also brings in an opportunity. Of course, semiconductor manufacturing requires very huge investments. The Indian automobile industry alone can-not assure full viability of such an investment in semiconductor projects. Hence, there is a need for consolidation across sectors,” Ayukawa said.

He noted that in response to this major challenge, the administration is pursuing only a few long-term actions.

“The invitation by the government for expression of Interest for manufacturing semi-conductors in India is a much needed, long-term step, in the right direction. I am sure global investors will take advantage of this opportunity in India,” Ayukawa noted.

Meanwhile, he continued, the domestic component sector would have to deal with the current semiconductor scarcity by deepening its engagement with chip suppliers.

Semiconductors are silicon chips that provide control and memory operations in a variety of electronic devices, including automobiles, computers, and cellphones.

In recent years, the use of semiconductors in the automotive industry has increased significantly, with new models featuring an increasing number of electronic technologies like as Bluetooth connectivity, driver-assist, navigation, and hybrid-electric systems.

In response to the government’s Aatmanirbhar Mission, the industry leader claimed that the Society of Indian Vehicle Manufacturers (SIAM) and the Automobile Manufacturers Association of India (ACMA) have collaborated to produce a localization plan for the automobile industry.

“This roadmap details key components across segments and the corresponding opportunity for localisation. Look forward to the support of each industry member in this initiative to make India Aatmanirbhar,” Ayukawa said.

He stressed that such an attempt could only succeed with the government’s complete support.

“We’d approach the government together to ask for support for this roadmap,” Ayukawa further added.

In response to a question about the development of new age technologies, he stated that there is a big focus on lowering carbon emissions all over the world.

“As a responsible industry, it is our duty to move as close as possible to Carbon Net Zero with local manufacturing. For this, we have to develop multiple alternate powertrain technologies,” Ayukawa noted.

He urged the auto component industry to increase its focus, investments, and research and development on all such powertrain technologies, while praising the support and encouragement from various government ministries on multiple technology solutions such as e-mobility, CNG, LNG, Bio-gas, and Ethanol.

“I am sure, only the combination of all these technologies will help us be closer to Carbon Net-Zero. Many of these technologies are new for the industry and have their own challenges of viability and infrastructure. While our talented engineers work on these solutions, we would keep coming back to the government for guidance and support,” Ayukawa stated.

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