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India’s dream of emerging as a global hub for technology is incomplete for one reason – semiconductors manufacturing. From smart phones to electric cars and from defense systems to data centers, the semiconductors contain at the back of the modern technology. As disruption in supply chains around the world, and countries fighting their way to produce, India has made a brave step to be considered an important player in this field.
We will discuss the story of development of semiconductor manufacturing in India, the strategic thrust by the government, challenges faced by the industry and the questions on what would the future be of the nation’s chip ecosystems.
India’s Semiconductor Independence: How is it Important?
For decades, the Indian has been a leader in software, IT services and digital architecture; but dependent heavily on imports in hardware and chip. The present pandemic and the lack of semiconductors dependencies afterwards highlighted the vulnerabilities of such dependencies especially for industries such as automotive, electronics and telecommunication.
Thus acknowledging this fact the Indian government launched Semicon india Program in the year 2021 with an investment of $10 billion (76,000 CRore Rupees). The scheme envisages expansion of semiconductor manufacturing, designing and fabrication in India and packaging making it sure to supply of end product. This impetus is not just about chip fabrication, it is about strategic self-sufficiency and Indian positioning itself to have a technological foundation for its digital future.
Major Semiconductor Projects in India
The psyche of India in semiconductor is ever evolving at a quick time, with numerous heavy projects being unveiled in last couple of years.
1. Micron Technology’s Semiconductor plant at Gujarat.
In the year 2023, US-based semiconductor maker Micron Technology had made a major investment of $2.75 billion in building an assembly, testing, marking and packaging (ATMP) facility in Sanand in Gujarat. This is the first high tech large scale semiconductor packaging facility in India and is a mile-stone for the manufacturing aspirations of the country.
2. Tata Electronics Semiconductor Business:
Tata Group has actually made its entry into the semiconductor space by importing a subsidiary – Tata Electronics that is setting up a semiconductor manufacturing facility as well as an Outsourced Semiconductor Assembly and Testing (OSAT) facility. Besides, Tata had purchased majority stake in Tejas Networks in order to diversify its portfolio all the more in the consortium of telecom and electronics.
3. Vedanta-Foxconn Partnership
Foxconn recently has established a 20 billion dollar Semiconductor Manufacturing Plant in Gujarat in a major partnership with Vedanta group. Though the alliance later hinted at a restructuring, it demonstrated the tendency for India to invest in a large chip production.
4. ISMC Analog Fab in Karnataka
Tower Semiconductor (Israel) backed ISMC consortium has mooted an analog chip fabrication plant of the value of USD 3 billion at Mysuru, Karnataka. The project is based upon manufacturing of an analog chip for input and output processing for automotive and other industrial electronics.
These trends suggest that India is out of being a semiconductor-consuming country to an active player in the worldwide semiconductor value chain.
How will semiconductor manufacturing be beneficial to India?
Semiconductor manufacturing is not a technological undertaking, but a strategic necessity. Here’s the key reason that India considers it to be so important:
- Boom in Economy : If semiconductors and other fabs are constructed billions can be poured into investments and thousands of good, high tech jobs can be developed.
- National Security: Chip play a key role in defense, aerospace, communications systems – all systems where interdependence can pose a security issue.
- Reduced Reliance on Imports: India is wholly dependent on import of semiconductor. Domestic manufacturing saves Billions in foreign exchange.
Within the ambit of friendship policies and infrastructure however, India has the capability to undergo transition from a chip importing nation to a chip exporting nation and become a major contributor of the global chip chains.
Government Policies That Are Driving the Sector
Crafting the India Semiconductor mission – Policy support and incentives + partnerships
1. Semicon India Program
Offers upwards of 50% of project cost towards semiconductor fabrication plants (fabs), display fabs, and advanced manufacturing equipment facilities for advanced technologies for national defense/priority (ATMP-OSAT).
2. Design Linked Incentive (DLI) Model
Under it, start-ups and design houses will be encouraged for developing indigenous semiconductor IPs & products for incentives up to US$ 30 crores per applicant.
3. Semiconductor integrated mission(ISM)
ISM is a specialised organisation under the ministry Electronics and IT (MeitY) which takes the lead in the national strategy on semiconductor and promotes the collaborations with the leading industry players across the world.
4. Skill Development Programmes
Workshops and seminars in collaboration with various institutes IITs, NITs in development of possible human resource in the Semiconductor engineering, fabrication and testing.
Future Trajectory: Chances and Prediction
Indian Semiconductor India is still in its infancy but it is a very clear movement. With the support of the government policy, rising of investor confidence, and a boom in the domestic demand, the India is on the way to becoming one of the leading semiconductor hub of Asia-Pacific. What’s in store during the next ten years is:
- Completed manufacturing facilities and packing centres in the states of Gujarat, Karnataka and Tamil Nadu.
- The chip manufacturing business can be linked with India’s power grid including electric vehicles, telecom and defense sectors.
- Improvement in research of nanotechnology and material science
- Growth of semiconductor design start-ups under DLI scheme.
India has the potential to play a pivotal role in the Global chip industry until 2030, if India is able to back the manufacturing in a well-managed way, weaning itself from the dependence on imports and also enhancing its competitive position as a natural digital manufacturing power house.
Conclusion
Semiconductor Manufacturing India is not just about industrializing. It is about being strategically autonomous, economic, and technologically prime. By investment in innovation, supporting talent, and creating world-class infrastructure, India can transition from being a player in the global digital economy to a shapemaker of this economy.
The writing is on the wall: If India is to become a leading technological force, the economics of the parameters will have to be forged, not only in labs dedicated to software engineering, but in semiconductor complexes.
Also Read: Artificial Intelligence: Evolution And Possible Developments
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