India aims to become a semiconductor leader by investing ₹1.26 trillion in production and launching the Indian Semiconductor Mission. With global partnerships and a strong talent pool, the country seeks self-reliance in chip manufacturing to support its growing tech sector.
Imagine a world devoid of smartphones, sleek laptops, or life-saving medical equipment. It’s a reality unthinkable in the digital age, and the key ingredient that holds the balance of this technology revolution, preventing it from collapsing and taking us back a thousand years, are semiconductors — the tiny, intricate chips that power our devices and infrastructure.
As the world’s reliance on technology grows, so does the demand for these critical components as well as the global race for self-reliance. India, with its vibrant IT sector and growing need for self-reliance in the semiconductor market, is poised to become a major player in the global semiconductor game as the government amps up investments in the sector.
Why Semiconductors Matter
Frank Herbert, in his sci-fi masterpiece Dune, notably wrote, “Whoever controls the spice controls the universe.” Today, the analogy holds true for semiconductors. These minute chips, some smaller than your fingernails, are the powerhouses behind everything from everyday gadgets like smartphones to complex machinery in factories and vehicles. They are the workhorses of the digital age, powering artificial intelligence, advanced communication networks, and even medical advancements. The implications of which extend beyond business and economics. So, one can imagine what a world without them would look like.
The global semiconductor market is a behemoth, expected to become a trillion-dollar market by 2030. However, production is concentrated in a few countries, with Asia leading the pack. This dependence on a limited number of suppliers creates vulnerabilities in the global supply chain. Geopolitical tensions and trade wars can disrupt chip production, leading to shortages and price fluctuations.
India’s Semiconductor Ambitions
With its massive population and growing technology sector, India is a prime target for semiconductor consumption. India’s semiconductor market is valued at an estimated $15 billion and is expected to reach $55 billion by 2026. However, the country currently imports over 95% of its chip needs. This dependence exposes India to external factors and hinders its ability to harness the full potential of its IT industry.
Recognising this strategic imperative, India is taking bold steps towards self-sufficiency in semiconductors. The government of India has approved a major investment of 1.26 trillion Indian rupees (US $15.2 billion) in semiconductor and electronics production that will include the country’s first state-of-the-art semiconductor fab. Furthermore, it has also launched the Indian Semiconductor Mission (ISM) is a comprehensive initiative aimed at fostering a robust domestic ecosystem offering 50% capital expenditure support to new entrants, production-linked incentive (PLI), and design-linked incentive (DLI) schemes with an outlay of ₹76,000 crore, as well as state government incentive support, international partnerships, and a focus on talent development.
These efforts are attracting major players to Indian shores. Global giants like Intel, AMD, and Micron are establishing design and R&D centres and fabrication facilities in the country, the largest of which was inaugurated in Bengaluru recently. This bolsters India’s production capacity and creates a ripple effect, generating over a million new jobs in chip design, manufacturing, and related fields.
Building a Robust Ecosystem
India’s journey towards becoming a semiconductor leader won’t be smooth sailing. Established players like Taiwan and South Korea possess cutting-edge chip manufacturing technologies. Collaboration with these nations is crucial for India to gain access to advanced processes. Additionally, advanced chip design and fabrication require a highly skilled workforce. India needs to invest in robust educational programmes and attract Indian professionals working abroad – nearly a quarter of the global semiconductor industry’s senior talent is already Indian!
However, amidst these challenges lie immense opportunities. India boasts a strong talent pool in science and technology, with Global Capability Centers and a specialised workforce already established in the semiconductor space. Around 30 per cent of the new global capability centres established in India during the December quarter of last year were in the semiconductor space. The Electronics and IT Ministry plans to train over 85,000 engineers in chip design over the next five years to address the skill gap.
This talent pool can be harnessed with targeted training programmes to fuel the domestic industry. Additionally, India offers a cost advantage compared to established players, making it an attractive alternative for chip production.
Shaping a Future Powered by Technology Services
The future of India’s semiconductor industry is brimming with potential and goes beyond chip fabrication. Technology services companies, the backbone of India’s IT sector, will play a pivotal role in realising these aspirations.
Technology services companies possess a wealth of experience and expertise. By leveraging this, they can design next-generation chips tailored to specific applications — a crucial step for India to develop a competitive edge in the global market. They can also provide valuable integration and validation services, ensuring seamless interaction between different chip components, testing functionality under various conditions, and identifying potential bugs. This expertise will be crucial for the quality and reliability of India-made chips.
Furthermore, technology services companies can act as a bridge between chip designers, manufacturers, and end-users across sectors ranging from automotive and telecommunications to consumer electronics. These companies can foster a robust and integrated ecosystem that accelerates India’s semiconductor journey by facilitating communication and collaboration.
Finally, modern chip fabs are highly automated facilities, relying heavily on advanced software and data analytics. Technology services companies can play a vital role in the digital transformation of these fabs. This includes implementing Industry 4.0 solutions for real-time monitoring, predictive maintenance, and data-driven process optimisation. Their expertise will be key to ensuring efficient and cost-effective chip production in Indian fabs.
In conclusion, India’s semiconductor ambitions are not just about building fabs and producing chips. It’s about creating a holistic ecosystem that leverages the strengths of various stakeholders. With their established expertise and vast talenty services companies pool, technolog will be a critical catalyst in propelling India towards becoming a global leader in the semiconductor industry. By collaborating effectively with chip designers, manufacturers, and end-users, these companies can help India not only become self-reliant, but also emerge as a major innovator in the burgeoning global semiconductor market.
This ambitious journey will require sustained investment, strategic partnerships, and a commitment to fostering a culture of innovation. But with its vast potential and a determined will, India is well-positioned to carve its own Silicon Valley in the global silicon landscape, shaping a future powered by innovation and shaped by Indian ingenuity.
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