Semiconductor sourcing time could take up to two years, says Fuji Electric India CEO

Across the world, the semiconductor supply crisis persists even as chip manufacturers in China and Taiwan saw their capacities impacted last year thanks to long COVID-19 lockdowns. Today, these suppliers are contending with a logjam due to a long list of pending orders and supply chain interruptions.

“The average semiconductor sourcing lead time today is anywhere between six months to two years,” said Waghmare, adding, “Some chips have sourcing lead times that are beyond two years.” He added that predicting when sourcing timelines would shrink was a difficult task.

On Wednesday, Fuji Electric India announced the commencement of operations at a new plant in Chennai. The group has invested Rs 150 crore in establishing the plant, which comes with capacities of 120,000 drives and 200,000 PCB units. The launch now means Fuji Electric is set to hit a revenue milestone of Rs 1,500 crore in India by FY25.

“The manufacturing, sourcing and R&D capabilities at the new plant will ensure that we make cost-effective products,” said Waghmare, “The company has been growing at 30 to 35 percent in India, and we are looking to further invest around Rs 300 to 400 crore in this market.”

The recent budgetary allocation of Rs 35,000 crore towards renewable energy projects comes as good news for electric component firms such as Fuji Electric. “But we can register growth of 20 to 25 percent even without such government incentives,” Waghmare said.

A customs duty waiver on import of components for manufacture of lithium ion batteries also comes as good news to the company owing to investments in EVs and data centres.