India's bid to dominate the semiconductor arena

Within the next 5 years, India is set to ascend the high-stakes global stage of semiconductor manufacturing. By leveraging its unparalleled design capabilities & rendering a substantial USD 10 billion in incentives, the country aims to attract manufacturers to establish cutting-edge fabs and production units.

This strategic move seeks to challenge the dominance of Taiwan, South Korea and China in the Semiconductor arena, said IT and Telecom Minister Ashwini Vaishnaw in an interview.

According to a recent report, the semiconductor industry in India is anticipated to reach a value of USD 100.2 billion by 2032, growing at a CAGR of 20.1 per cent until 2032. The future of semiconductor industry in India looks bright owing to the growing popularity as well as manufacturing of EVs in the country and it is projected that the use of semiconductors in various sectors such as electrification, networking, will increase.

He also stated that the well-crafted policies of the country are making manufacturers to set up new semiconductor fabrication units as well as pouring investments in the related industries.

Some of the top automobile companies already have their factories in India which include Renault – Nissan to Hyundai. The country also has electronic manufacturers such as Samsung, Computer manufacturers that include Dell, Apple suppliers etc.

The 5-year target

When asked about the timelines when our country will aim at being a formidable player Ashwini stated that “in the coming 5 years, definitely”. "...it is very important for any developing country, an economy of our size, to have a semiconductor supply chain within the country. We have very strong design capabilities, as a corollary of design capabilities we must have the manufacturing capability also because that is where value gets added further," Vaishnaw explained.

India will become self-reliant owing to the semiconductor plans and this will lead to a multiplier effect on the country’s economy as well as numerous industries, resulting in job creation and spur livelihoods.

India boasts one-third of the design talent in the world, approximately. This is a valuable resource which the governments want to leverage. Therefore, by doing this, the country can position itself as an indispensible partner for the technological aims for the US and other western counterparts.

Semiconductor Fabs

Murgappa Group’s CG Power and Industrial Solutions has formed a joint venture with Renesas Electronics America Inc. & Stars Microelectronics (Thailand) Public Co. Ltd. (Stars) to establish an outsourced semiconductor assembly and testing (OSAT) facility in Gujarat. CG has also inked agreements with Renesas Electronics Corporation, Japan and Stars for technology, services, offtake, manufacturing, technology know-how sharing and technical support.

Tower Semiconductor, Israel is on the verge of securing an USD 8 billion fabrication plant in India. As per experts and the Scheme norms, Tower Semi will have to indicate an investment partner.             

With an investment of USD 109.71 billion, Tata Electronics Private Limited will be collaborating with Powerchip Semiconductor Manufacturing Corp, Taiwan in order to set up a semiconductor fab in Gujarat, while TSAT (Tata Semiconductor Assembly and Test Pvt Ltd) will establish a semiconductor fab in Assam (with an investment of USD 325.99 million).

PLI Scheme for semiconductor manufacturing

The PLI Scheme which is the ‘Modified Programme for Semiconductors with Display Fab Ecosystem’ was announced in the year 2021 in the month December. The outlay was of rupees 76000 crore. But this was changed in September 2022 with an aim to attract global investors with incentive support. The PLI Scheme which was announced in 2021 in December offered numerous degree of fiscal support. This was provided to several categories with an aim to develop the semiconductors & display the manufacturing ecosystem in the country. The range of these was between 30 to 50%, which were made uniform in he year 2022 in the month of September. Since fifty percent of the project cost across technology nodes to set up semiconductor fabs that includes cutting-edge computing chips and other chips which are used in automotive,  telecom and power sectors.

“The increasing significance of digital on lives and enterprises has increased the demand for semiconductors in the international market. The scenario is no different in India, as homegrown players are vying for the potential to be a global leader,” says Sriram Rajagopalan, MD & Founder, Mettlesemi.

Research & Development

The India Semiconductor R&D Committee provided the report on ISRC to Shri Rajeev Chandrashekar, Union Minister of State for Skill Development & Entrepreneurship and Electronics & IT. 

While appreciating the efforts made by the members of India Semiconductor R&D Committee, the Minister said, “After months of dedicated research, India Semiconductor R&D Committee has laid out a roadmap of ISRC, realizing what can be the architectural design of PM Modi’s vision for the semiconductor ecosystem. After being absent from the semiconductor ecosystem for decades and missing many opportunities, we are now playing catch up.”

“This institution will be a core institution in India’s growing capabilities in semiconductors. It will be the Indian equivalent of IMEC, Nano Tech, ITRI and the MIT Micro-electronic labs which have been the pioneers of every cutting-edge technology in the world,” he adds.

ISRC has a vision to establish a world-class research institution that focuses on advanced packaging, semiconductor processes, EDA tools, compound semiconductors & Fabless design. It aims to nurture a vibrant semiconductor ecosystem by promoting collaboration among academia, industry and the government. And this is expected to bridge the gap between manufacturing & research and helping in seamless transfer from lab to fab. The ISRC aims to establish the country as one of the global foundry suppliers for semiconductors, integrated systems & packaging, right from design to products.

It is projected that the use of semiconductors in various sectors including electrification, networking, safety & communication would increase owing to the rising fame & manufacturing of EVs in the country.  The units which prioritize developing job prospects as well as strengthening chip design strengths possess the potential of transforming the semiconductor sector completely. The enhanced allocation in the interim budget by the country coupled with the country’s collaboration with Micron as well as the establishment of 3 new manufacturing facilities highlights the country’s commitment of becoming one of the leading semiconductor chips producers. India should continue to attract high-tech investors and should create a pro-R&D environment that provides consistent as well as transparent financial & tax support along with encouraging cultivation of homegrown talents.

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