India’s Rise in the Semiconductor Ecosystem

India’s Rise in the Semiconductor Ecosystem

Background:

For decades, the semiconductor ecosystem has been dominated by a handful of nations, including the United States, Japan, South Korea, and Taiwan. These countries held the reins of innovation, manufacturing, and research in this critical field. However, India, despite its immense talent pool and technological prowess, remained largely on the periphery.

Recent Developments:

In recent years, India has made significant strides, positioning itself as a major player in the global semiconductor ecosystem. Here are some key developments:

1. Investment Proposals:
   • Since January 2022, India has received a cumulative amount of USD 26 billion in investment proposals for semiconductor-related projects. This influx of capital is a testament to India’s growing significance in the industry.
   • The government’s approval of three-chip manufacturing units, entailing an investment of Rs 1.26 lakh crore, underscores India’s commitment to fostering a robust semiconductor ecosystem.
2. Unique Opportunity:
   • India now finds itself well-equipped with:
     • Talent: A skilled workforce capable of contributing to semiconductor design, research, and development.
     • Electronic System Design: Expertise in creating cutting-edge electronic systems.
     • Future Labs: Facilities for experimentation and innovation.
     • Manufacturing and Packaging Capabilities: Infrastructure to produce and package semiconductor components.
   • These elements collectively position India as a significant player in the global semiconductor landscape.
3. Changing Global Dynamics:
   • Global value chains (GVCs) are evolving rapidly. Digitization, artificial intelligence, and the Internet of Things (IoT) are reshaping traditional architectures in computing, automotive, industrial, and telecom sectors.
   • India recognizes this paradigm shift and is strategically aligning itself to capitalize on emerging opportunities.
4. Bharat Semiconductor Research Centre:
   • The government plans to establish the Bharat Semiconductor Research Centre, further bolstering India’s research and development capabilities in semiconductors.
5. Tailwinds and Partnerships:
   • India benefits from strategic partnerships with the United States, the European Union, Japan, and South Korea. These collaborations act as tailwinds, propelling India’s semiconductor ambitions.

Challenges and the Road Ahead:

While India’s progress is commendable, challenges remain:

1. Geopolitical Uncertainties:
   • The ongoing Russia-Ukraine conflict could impact India’s semiconductor aspirations. Dependence on other countries for critical components remains a vulnerability.
2. Infrastructure and Skill Enhancement:
   • India must continue investing in infrastructure, research, and skill development to compete globally.
   • It’s essential to close the divide between academic research and industry.
3. Policy Support and Innovation:
   • Favourable policies, regulatory clarity, and incentives are essential for sustained growth.
   • Encouraging indigenous innovation and startups will drive long-term success.

Conclusion:

India’s journey from missed opportunities to semiconductor prominence is remarkable. With the right strategies, investments, and collaborations, India can disrupt the global semiconductor ecosystem, contributing to technological advancements and economic growth.

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