Transforming India: The Semicon Ecosystem Revolution

Dipak Kurmi

(The writer can be reached at dipakkurmiglpltd@gmail.com.)

As technology permeates every aspect of our daily lives, semiconductors have emerged as the indispensable backbone of modern society. These minuscule marvels drive our gadgets, power our communication networks, and propel advancements in fields ranging from agriculture to healthcare and transportation. India, cognizant of the vast socio-economic opportunities and strategic significance inherent in this technological evolution, is spearheading the establishment of a resilient semiconductor ecosystem and nurturing a skilled workforce to fuel its growth.

India’s ambition to achieve self-reliance and assert global leadership in the semiconductor domain receives substantial backing from projections indicating the creation of more than a million job openings. These opportunities span across diverse roles such as semiconductor design and manufacturing engineers, R&D scientists, operators, technicians, and skilled workers involved in chip design, semiconductor fabrication, packaging, and sales facilities. Over the forthcoming five years, this burgeoning industry promises to significantly contribute to employment growth and economic advancement in India.

In the final quarter of last year, approximately 30% of the new global capability centres established in India were focused on the semiconductor sector, showcasing a burgeoning interest in harnessing local talent for activities like front-end design, performance testing, and post-silicon validation. This insight comes from the latest report by the National Association of Software and Service Companies (Nasscom) and Zinnov. Notably, major players in chip design, such as Intel, Texas Instruments, AMD, Nvidia, and Qualcomm, have set up design and R&D hubs in India. AMD, for instance, recently inaugurated its largest global design centre in Bengaluru, underscoring India’s significance as a hub for semiconductor innovation and development.

During March, a significant event titled ‘India’s Techade: Chips for Viksit Bharat’ marked the laying of the foundation stone for three semiconductor projects valued at Rs 1.25 lakh crore.

Tata Electronics, in collaboration with Taiwan’s Power Chip Semiconductor Manufacturing Corporation (PSMC), is pioneering India’s semiconductor industry with two groundbreaking projects. The first, a semiconductor fab plant in Dholera (Gujarat), entails an investment of Rs 91,000 crore, while the second plant in Morigaon (Assam) involves an investment of Rs 27,000 crore. These ventures are poised to commence chip production in 2026. Meanwhile, Micron India, a US-based semiconductor giant, is set to inaugurate its plant in Sanand (Gujarat) with an investment of Rs 22,500 crore, marking a significant milestone in India’s quest for “Made in India” memory chips, expected by December. Additionally, Semiconductor Corporation of India (SCL) is embarking on a comprehensive expansion project at its Mohali facility with an investment of Rs 20,000 crore, aimed at bolstering contributions to ISRO and global space research endeavours, including the upcoming Chandrayaan-3 mission.

Despite the promising growth of India’s semiconductor chip ecosystem, the nation still grapples with a staggering 95% import dependency on major players like the US, Taiwan, China, Japan, Malaysia, Singapore, and South Korea.

In a bid to mitigate import reliance, India has taken decisive steps to bolster its domestic semiconductor industry. The unveiling of the India Semiconductor Mission (ISM) underscores this strategic endeavour, offering substantial support, including 50% capital expenditure assistance to new entrants, along with production-linked incentive (PLI) and design-linked incentive (DLI) schemes, totaling an outlay of Rs 76,000 crore. Complemented by state government incentives, international partnerships, and a concerted focus on talent development, these initiatives signal a concerted effort towards self-sufficiency. Furthermore, the Ministry of Electronics and Information Technology has laid out plans to train more than 85,000 engineers in chip design over the next five years, addressing critical skill gaps and nurturing a robust ecosystem poised for self-reliance.

As the geopolitical landscape undergoes shifts due to China-US trade tensions, companies are increasingly exploring alternative production and sourcing options beyond China. In response to this industry migration, India and several Southeast Asian countries, including Malaysia, Singapore, Thailand, Vietnam, and Indonesia, emerge as favoured destinations for future front-end manufacturing activities. India’s integration into this evolving ecosystem comes at a pivotal moment, offering strategic diversification in the global supply chain. This positioning not only establishes India as a prominent hub for semiconductor design, manufacturing, and technology development but also promises to catalyse the creation of employment opportunities for the nation’s burgeoning youth population.

Bengaluru and Hyderabad emerge as the primary hosts for India’s semiconductor global capability centres (GCCs), collectively accommodating over two-thirds of the country’s total 55 semiconductor GCCs. This concentration underscores India’s significant dedication to fostering the semiconductor industry. With a robust infrastructure comprising more than 95 GCC units and a specialized workforce numbering 50,000, India showcases its strong commitment to semiconductor excellence. Presently valued at approximately $15 billion, India’s semiconductor market is poised for remarkable growth, projected to soar to $55 billion by 2026. Key sectors such as smartphones and wearables, automobile components, computers, and data storage collectively dominate more than 60% of this burgeoning market.

Navigating the intricacies of semiconductor manufacturing demands unparalleled precision, operating at the smallest scales imaginable. Given the interconnected nature of the global chip industry, Indian firms must forge strategic collaborations with nations like Taiwan and South Korea. These partnerships are essential for accessing cutting-edge technologies that empower them to meet the evolving demands of emerging applications. From autonomous machines to smart medical devices, futuristic 6G communications, and AI-driven electronics, leveraging advanced technologies is paramount to sustaining innovation and competitiveness in the semiconductor landscape.

Addressing the skill gap is imperative for India, particularly in the realm of advanced chip design and fabrication. Despite the global semiconductor manufacturing industry boasting a talent pool of 2.3 million professionals, Indian expertise accounts for nearly 25% of senior talent within this domain. Closing this gap is essential for India to fortify its position as a key player in the semiconductor arena.

In a bid to allure and retain top talent, Indian firms are organizing roadshows in Hsinchu, Taiwan’s chip manufacturing hub. According to Communications and IT Minister Ashwini Vaishnaw, a noticeable trend is emerging: engineers returning to India from the US tend to be younger, whereas those from Taiwan, Singapore, and Malaysia are typically older, with extensive experience, often surpassing 45 years of age. Anticipating their participation in India’s burgeoning high-tech manufacturing revolution, these efforts aim to tap into the expertise and experience of seasoned professionals from across the globe.

Looking ahead, the semiconductor industry in India is poised for a remarkable journey filled with promise. Its trajectory will be pivotal in sculpting the nation’s advanced technological landscape, fostering economic expansion, and solidifying India’s standing as a beacon of innovation on the global stage. Furthermore, this industry holds the potential to create pathways for aspiring entrants and Indian talent currently engaged in the sector worldwide, with many harbouring a desire to reconnect with their roots.

India’s aspiration to achieve self-sufficiency and assert prominence in the semiconductor realm is evident. Backed by a robust talent pool, abundant resources, and well-developed infrastructure, India is primed to make substantial advancements in the semiconductor domain, charting a course towards global leadership in the foreseeable future.