Can India Become a Credible Player in the Semiconductor Arena?

The US and China are currently engaged in a tech war, with Washington aiming to limit Beijing’s access to advanced semiconductor technologies. Semiconductors are expected to shape geopolitics over the next five decades, according to Intel CEO Pat Gelsinger. The US Commerce Secretary, Gina Raimondo, has stated that the US will prevent China from accessing the most advanced US semiconductor technology.

So, where does India stand amidst these geopolitics? Can India establish itself as a credible player in the highly competitive semiconductor arena? The country may not be able to produce advanced semiconductors like Taiwan’s TSMC or even China’s SMIC, but there are other crucial factors that India can work on to establish itself as a semiconductor manufacturer.

Developing Crucial Facets

While India may not have the expertise, investment, infrastructure, and ecosystem to manufacture advanced semiconductors, it has the intellectual prowess to design them. The government is taking steps to change this by positioning India as a global hub for electronic systems design and manufacturing (ESDM). An outlay of $10 billion has been approved, with fiscal support equivalent to 50% of the project cost provided under the scheme for setting up semiconductor fabs.

These initiatives have attracted leading global players. Micron Technology from the US has committed to investing $825 million in a semiconductor testing and assembly plant in Gujarat, with a total proposed investment of $2.75 billion. Applied Materials, an American semiconductor toolmaker, will invest $400 million in a new engineering center in Bengaluru over the next four years.

Building a Highly-Skilled Workforce

Building a semiconductor fab is a complex and expensive process that requires a highly-skilled workforce. India is making progress on this front as well. The Semicon India Future Skills Talent Committee stated that the country needs 1.2 million skilled workers in the semiconductor industry by 2032. The curriculum in colleges and universities is being revised to meet this demand, with programs like BTech Electronics (VLSI Design and Technology) and a diploma in Integrated Circuit Manufacturing being introduced.

Furthermore, the Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) scheme aims to train 10 million people across sectors, including the semiconductor industry. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) under the National Skill Development Corporation will also train youth for employment in semiconductor foundries.

Developing a Start-up Ecosystem

In addition to a skilled workforce, India also needs to develop a start-up ecosystem to become a global player in semiconductors. The Modified Programme for Semiconductors and Display Fabs by the Ministry of Electronics and Information Technology (MeitY) is a step in the right direction. However, India can also learn from the successes of other countries, such as China.

China has a significant advantage over India in semiconductor foundries, partly due to heavy state backing. Therefore, India needs to roll out relevant education policies, attract investment, and nurture an ecosystem that fosters innovation in semiconductor technologies. A concerted push in these areas is vital for India to become a major player in the semiconductor industry.

In conclusion, while India may not be able to compete with the likes of Taiwan and China in manufacturing advanced semiconductors, it has the potential to become a credible player in the semiconductor arena. With the right investments, infrastructure, skilled workforce, and supportive policies, India can establish itself as a major player in this critical industry.

Author: Sanket Goel