Semiconductors serve as the foundation of the digital era as it enables the miniaturization and improved functionality of electronic devices. They facilitate the flow of electrical currents in electronic components, making them indispensable in a wide range of applications across various industries.
From consumer electronics and automotive systems to medical devices and telecommunications infrastructure, semiconductors underpin the functioning of numerous cutting-edge technologies.
The global demand for semiconductors is skyrocketing, fueled by the rapid proliferation of advanced electronic devices and the burgeoning fields of Artificial Intelligence and IoT. Recognizing the strategic importance of semiconductors in driving economic growth and technological advancement, India is taking bold steps to establish a formidable semiconductor ecosystem.
With a visionary approach and strategic partnerships, India aims to emerge as a dominant player in the semiconductor industry, attract substantial investments, and foster a culture of innovation. In this article, we explore how India is setting up a massive semiconductor ecosystem and positioning itself as a global leader in this transformative industry.
India’s Semiconductor Strategy
The foundation for India’s semiconductor journey was laid in December 2021 when the Prime Minister Modi approved the Semiconductor Policy. India has a far-reaching semiconductor strategy aimed at establishing a sustainable ecosystem over the next decade
The country aims to be known not only as a trusted and resilient partner on the global stage but also as a significant market with robust domestic demand. India boasts the largest pool of semiconductor talent in the world, after North America. The country’s emphasis on skill development and fostering a culture of innovation has produced a steady stream of talented professionals, making India a sought-after destination for semiconductor companies seeking top-notch talent.
The government recognizes the potential of homegrown expertise and is also focusing on design-led performance and innovation to propel the semiconductor industry forward. The country is actively leveraging its talent pool to foster a culture of research and development, setting the stage for India to become a center for cutting-edge semiconductor design.
Government Initiatives and Investment Plans
The Indian government has implemented several initiatives and investment plans to bolster the semiconductor ecosystem. One such initiative is the Production-Linked Incentive (PLI) Scheme for Semiconductors and Displays, expected to attract a staggering $1.6 trillion in investments in the semiconductor industry over the next six years.
The PLI Scheme aims to support semiconductor manufacturing and display fabrication in India, making it an attractive destination for global players. Additionally, the government plans to establish the India Semiconductor Research Centre through a public-private partnership model. This includes modernizing the Semiconductor Laboratory in Mohali, Punjab, to create a research-cum-commercial fab.
The central government is investing $1.2 billion in modernizing the 30-year old Semiconductor Laboratory (SCL) in Mohali, Punjab, with the goal of achieving volume production and creating profitable assets. The SCL currently produces 8-inch CMOS microchip wafers, which are strategically vital for the country’s space program.
This investment aligns with the India Semiconductor Mission’s vision to modernize and commercialize semiconductor facilities, thus enhancing India’s capabilities in manufacturing.
Moreover, the Ministry of Electronics and Information Technology (MeitY) is collaborating with Invest India to attract investments from various global semiconductor giants such as Japan, Taiwan, South Korea, Europe, and the US. The goal is to position India as an appealing investment destination for semiconductor research, development, and manufacturing.
Fostering Innovation through Startups
India’s semiconductor ambitions are also fueling innovation through startups. The government has earmarked significant funds, approximately INR 11-12 billion, to support semiconductor design startups. The Semiconductor Design-Linked Incentive (DLI) Scheme has already onboarded 27 startups, providing financial incentives and infrastructure support for the development and deployment of semiconductor designs.
To nurture early-stage startups, an electropreneur park was inaugurated at the University of Delhi’s (DU) South Campus in 2016. This incubation hub aims to nurture 50 startups, fostering the creation of at least five global semiconductor companies within five years.
Modernizing Semiconductor Facilities
The central government is investing $1.2 billion in modernizing the 30-year old Semiconductor Laboratory (SCL) in Mohali, Punjab, with the goal of achieving volume production and creating profitable assets. The SCL currently produces 8-inch CMOS microchip wafers, which are strategically vital for the country’s space program.
This investment aligns with the India Semiconductor Mission’s vision to modernize and commercialize semiconductor facilities, thereby enhancing India’s manufacturing capabilities.
The government’s initiatives are already starting to bear fruit. In 2022, Micron Technology announced that it would invest $2.75 billion in a semiconductor packaging plant in India. This is the largest investment in the semiconductor industry in India’s history.
In addition to Micron, a number of other companies have announced plans to invest in the semiconductor industry in India. These include:
- Intel: Intel has announced plans to invest $1 billion in a semiconductor design and manufacturing facility in India
- TSMC: TSMC has announced plans to invest $12 billion in a semiconductor manufacturing facility in India.
- Samsung: Samsung already has a semiconductor manufacturing facility in India, and the company has said that it plans to expand its operations in the country.
India’s journey towards establishing a strong semiconductor ecosystem is gaining momentum. With strategic initiatives, investments, and collaborations, the country is positioning itself to be a global semiconductor leader. By nurturing startups, modernizing semiconductor facilities, and attracting significant investments, India is primed to realize its vision of becoming a major player in the semiconductor industry.
The semiconductor industry is the backbone of the modern digital age, and India’s semiconductor journey is a testament to its commitment to technological advancement and innovation. As the country continues to strengthen its semiconductor ecosystem, we can anticipate a future where India leads the way in shaping cutting-edge technologies and contributing to the advancement of the global semiconductor industry.
