The Cabinet final week permitted three main semiconductor tasks, with an estimated funding of Rs 1.26 lakh crore to be established in Gujarat and Assam. The transfer comes when India is poised to develop its function in international semiconductor worth chains, based on a report by the Information Technology and Innovation Foundation (ITIF).
The report, titled “Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains,” underscores India’s potential to considerably improve its presence in the semiconductor trade. With a big and rising shopper and enterprise market, coupled with strengths in electronics manufacturing and international provide chain rebalancing, the report urges India to grab the chance to bolster its place in international semiconductor worth chains.
According to the ITIF report, India might set up as much as 5 semiconductor meeting, check, and packaging (ATP) services over the subsequent 5 years, whereas attracting fabs producing legacy semiconductors at 28 nm or above. This enlargement would leverage India’s in depth expertise in semiconductor design, the place it at present accounts for 20 per cent of the world’s built-in circuit (IC) design workforce, using over 125,000 employees.
However, the semiconductor trade faces a worldwide scarcity of expertise. While India graduates over 800,000 engineers yearly, solely a small fraction are deemed trade-prepared upon commencement. The report emphasises the necessity for higher programs, coaching, and preparedness to bridge this hole and capitalise on India’s pool of engineering expertise. So, the trade believes that with main chip firms expressing curiosity in India and its supportive insurance policies, the nation is poised to reinforce its technical capabilities and develop its expertise pool.
The India Perspective
Commenting on the report and the semiconductor ecosystem, Sanjay Gupta, chairperson of the India Electronics and Semiconductor Association (IESA), whereas talking to News18, highlighted the thriving nature of the ecosystem inside the nation.
Gupta famous that varied stakeholders, together with digital firms, semiconductor corporations, and software program firms, are actively partaking with the ecosystem. He emphasised that India’s semiconductor manufacturing encompasses a variety of industries, together with chemical and fuel firms, underscoring the great nature of the ecosystem.
Gupta, pointing to India’s emergence as a viable various in the worldwide semiconductor worth chain, stated: “While countries like Singapore, Korea, Hong Kong, Japan, and Malaysia excel in logistics and infrastructure, India offers unique advantages, including its demographic profile and scalability.”
With India projected to stay the youngest nation in the world for the subsequent 4 many years, coupled with its means to scale, Gupta asserted that India is poised to develop into a serious participant in the semiconductor trade. Meanwhile, addressing the necessities for semiconductor manufacturing, Gupta outlined 10 important components, together with uninterrupted electrical energy and water provide, sturdy logistics infrastructure, entry to expertise, and authorities assist for clearances and visas.
He additionally highlighted India’s monitor document of sustaining secure insurance policies which has instilled belief amongst international traders. He identified the truth that management inside the authorities can also be one of many key components that contributes to the steadiness of insurance policies, thereby attracting main investments.
While speaking concerning the report, he additional underscored the importance of India’s home market in driving semiconductor consumption. He identified that whereas different international locations could closely depend on exports, India’s financial system is poised to thrive on home consumption. With projections indicating substantial progress in semiconductor consumption inside the nation, he emphasised the potential for India to ascertain a self-sustaining semiconductor trade catering to native wants. This, he argued, wouldn’t solely scale back dependency on imports but additionally contribute to the steadiness of the Indian financial system by mitigating fiscal deficits and foreign money devaluation dangers.
Echoing Gupta’s ideas, Ashok Chandak, president of IESA, additionally stated: “Given its rapidly expanding domestic market, a well-developed design ecosystem, supportive government policies, and concerted industry collaboration to tap global markets, the present juncture presents a unique opportunity for the establishment of semiconductor manufacturing in India. The report underscores India’s tremendous progress towards becoming a prime destination for electronics and semiconductor manufacturing, capitalizing on its robust semiconductor design ecosystem.”
However, the report additionally goals to tell authorities efforts in deepening industrial ties between the US and India in the semiconductor sector whereas highlighting the truth that in latest years firms have turned to a “China-plus-one” or “China-plus-two” technique in order to bolster their provide chain resilience.
John Neuffer, president, and CEO of Semiconductor Industry Association (SIA) stated: “This is an exciting moment in history for the semiconductor industry and for strategic cooperation between the US and India. India is already an important link in the global semiconductor supply chain and has the opportunity to expand its role in our sector. While global competition for semiconductor investment is fierce, India’s value proposition is strong.”
Overall it’s understood that with the federal government’s assist and trade collaboration, India is nicely-positioned to strengthen its foothold in the worldwide semiconductor worth chains, contributing to the nation’s technological development and financial progress.
