India is making significant strides in becoming a global leader in the semiconductor industry, with several initiatives and partnerships to boost domestic manufacturing and innovation. The Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, said that India is emerging as a trusted partner in the global value chain of semiconductors, which are essential for powering various digital devices and applications.
India’s Semiconductor Vision
Semiconductors are tiny chips that enable the functioning of electronic devices such as smartphones, computers, cars, and medical equipment. They are also crucial for emerging technologies such as artificial intelligence, 5G, and internet of things. However, India currently relies heavily on imports to meet its domestic demand for semiconductors, which is expected to cross $80 billion by 2026.
To reduce this dependence and enhance its self-reliance (AtmaNirbharta) in the semiconductor industry, India has announced several incentives and policies to attract investments from domestic and foreign players. The government has allocated $10 billion for the Production Linked Incentive (PLI) scheme for electronics manufacturing
The government has also launched a National Mission on Semiconductor Technology and Display Fabrics, which aims to create a conducive ecosystem for semiconductor design, fabrication, assembly, testing, and packaging (ATMP) in the country. The mission also envisages setting up at least two semiconductor fabrication plants (fabs) and several display fabrication units in India.
India’s Semiconductor Achievements
India’s ambition of creating a successful semiconductor ecosystem has achieved significant milestones recently, with plans announced for the construction of India’s first semiconductor fabrication plant by the Israel-based International Semiconductor Consortium in February 2023. Additionally, Indian conglomerate Vedanta and Taiwanese manufacturer FoxConn have invested $19.5 billion in building semiconductor and display production plants in the state of Gujarat, with construction expected to commence in the next two and a half years.
India has also signed agreements with the US and Japan on critical and emerging technologies to enhance bilateral collaboration on semiconductor supply chains. These partnerships will help India access advanced technologies and best practices in the semiconductor domain, as well as strengthen its strategic ties with these countries.
India also boasts of a strong presence in the semiconductor design sector, with over 50,000 engineers working in more than 200 design companies. India houses some of the world’s leading semiconductor design firms such as Intel, Qualcomm, Texas Instruments, Broadcom, and Samsung. India also has a vibrant startup ecosystem in the semiconductor space, with over 40 startups working on innovative solutions for various applications.
India’s Semiconductor Potential
India has several advantages that make it a promising destination for semiconductor innovation and production. India has a large and growing market potential for semiconductor products, driven by its rapidly expanding population, rising middle class, increasing digitalization, and growing adoption of smart devices. India also has a huge talent pool of skilled engineers and scientists who can contribute to the development of cutting-edge technologies in the semiconductor field.
Moreover, India has a favorable business climate that offers various incentives and benefits to investors in the semiconductor industry. These include tax exemptions, subsidies, land allotment, infrastructure support, ease of doing business reforms, and protection of intellectual property rights. India also has a strategic location that enables it to access key markets in Asia, Europe, and Africa.
With these factors in its favor, India is poised to become a global chip powerhouse that can compete with the likes of China, South Korea, Taiwan, and the US. By developing its own semiconductor capabilities, India can not only reduce its import bill but also enhance its national security, economic growth, and technological leadership.