The Current Landscape
India’s semiconductor market is experiencing rapid growth, driven by rising demand for electronic devices and the government’s “Make in India” initiative. However, as Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), emphasizes:
“India is far behind on the manufacturing curve. We have no technology…So, what do we depend on? Global cooperation.”
Key Challenges
High Entry Costs
- Establishing semiconductor fabrication (fab) units requires significant capital investment, often exceeding $10 billion.
- The lack of a mature supply chain adds to financial burdens, discouraging new entrants.
Technological Gaps
- India lacks expertise in advanced semiconductor manufacturing processes, such as 3nm and 5nm technology nodes.
- Dependence on imports for critical equipment and raw materials limits self-reliance.
Scaling Issues
- While India excels in semiconductor design and software, scaling manufacturing demands robust infrastructure.
- Limited access to skilled labor and research facilities further complicates progress.
Global Collaboration: A Path Forward
India is actively forging partnerships with global semiconductor leaders to overcome these challenges:
Taiwan Partnerships
- Negotiations with Taiwanese giants like TSMC and UMC aim to establish semiconductor manufacturing plants in India.
U.S. Cooperation
- Under the U.S.-India Initiative on Critical and Emerging Technologies (iCET), both nations are strengthening semiconductor supply chains.
- Micron Technology plans to set up an assembly, testing, and packaging unit in Gujarat.
European Investments
- Companies like STMicroelectronics and ASML are exploring investments in India, focusing on talent development and infrastructure.
Success Stories and Local Efforts
Despite challenges, India has made notable progress in several areas:
- Vedanta-Foxconn Collaboration: This partnership aims to establish India’s first semiconductor fab, demonstrating its ability to attract global investments.
- ISRO and DRDO Contributions: Indian organizations like ISRO and DRDO are advancing indigenous semiconductor technologies for aerospace and defense.
- Startups in Design: Companies such as Saankhya Labs and Signalchip are excelling in chip design, showcasing India’s strength in semiconductor intellectual property (IP) development.
Government Initiatives
To support the semiconductor industry, the Indian government has introduced several key policies:
- PLI Scheme: The Production Linked Incentive scheme offers financial support to companies investing in semiconductor manufacturing and design.
- SPECS: The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors incentivizes the production of essential components.
- Semicon India Program: With a $10 billion budget, this program aims to establish a comprehensive semiconductor ecosystem, from design to fabrication.
The Road Ahead
India’s semiconductor journey will require sustained efforts and strategic global partnerships. Bridging gaps in technology, infrastructure, and talent is essential for India to become a key player in the global semiconductor value chain. By fostering innovation and leveraging international expertise, India can make significant strides in this competitive industry.
