India Enters Semiconductor Manufacturing Industry

India, the world’s second-most populous country, is set to enter the semiconductor manufacturing industry, as per the statement made by the IT Secretary of India, Shri Ajay Sawhney, in February 2023. This move marks a significant step towards achieving self-reliance in the technology sector, which is crucial to the country’s economic growth.

Semiconductor chips are essential components that power various electronic devices, including smartphones, computers, cars, and industrial machinery. They are crucial to the functioning of modern-day technology and are used in everything from the internet of things (IoT) devices to artificial intelligence (AI) and machine learning (ML) applications.

Until now, India has relied heavily on imports for semiconductor chips, which have become increasingly expensive due to supply chain disruptions and the global semiconductor shortage. According to industry experts, India’s semiconductor imports are estimated to be around $30 billion annually, making it one of the largest importers of these chips globally.

However, India’s plans to start semiconductor manufacturing will change the country’s dependency on imports and strengthen its domestic semiconductor industry. The move is expected to create job opportunities and reduce the country’s import bill.

The government has announced several initiatives to support the semiconductor industry’s growth in India, such as the Production Linked Incentive (PLI) scheme, which provides financial incentives to semiconductor manufacturers. Under this scheme, the government has set a target of $10 billion worth of semiconductor production within the next five years.

Moreover, the Indian government is also in talks with international semiconductor manufacturers such as Intel, Samsung, and TSMC (Taiwan Semiconductor Manufacturing Company) to establish semiconductor manufacturing units in the country.

India has a massive pool of engineering talent, and its low-cost manufacturing base is expected to attract semiconductor manufacturers to set up production facilities in the country. Moreover, India’s young population and growing middle class make it an attractive market for electronic devices, making it an ideal destination for semiconductor manufacturers.

However, establishing a semiconductor manufacturing facility requires significant investment in infrastructure, technology, and skilled human resources. The Indian government is working towards developing the necessary infrastructure and providing financial support to semiconductor manufacturers to make India a competitive destination for semiconductor manufacturing.

India’s semiconductor manufacturing plans are aligned with the country’s broader goal of achieving self-reliance or “Atmanirbhar Bharat” in critical sectors such as technology, defense, and healthcare. The COVID-19 pandemic exposed the country’s vulnerability to supply chain disruptions, which prompted the government to focus on building a self-reliant ecosystem.

The semiconductor industry is a critical component of the technology sector, and India’s plans to start semiconductor manufacturing will reduce the country’s dependence on foreign technology and strengthen its strategic autonomy.

Moreover, India’s semiconductor manufacturing plans are also in line with the global trend of diversifying the semiconductor supply chain to reduce dependence on a single country or region. The ongoing US-China trade war and the recent supply chain disruptions have highlighted the need for a more diversified semiconductor supply chain, and India’s entry into semiconductor manufacturing can help achieve that goal.

The Indian government is also promoting research and development (R&D) in the semiconductor sector to encourage innovation and create a conducive environment for semiconductor manufacturers. The government has set up the Indian Electronic Semiconductor and Association (IESA) to promote R&D and encourage entrepreneurship in the semiconductor industry.

The Indian government is also working towards developing a skilled workforce to support the semiconductor industry’s growth. The government has launched several initiatives to promote skill development in the electronics and semiconductor sector, such as the Skill India program and the National Skill Development Corporation (NSDC).

India’s plans to start semiconductor manufacturing have been welcomed by the global semiconductor industry, and several multinational semiconductor manufacturers have expressed interest in setting up production facilities in the country. This move is expected to create job opportunities, promote technology transfer, and enhance the country’s technological capabilities.

In conclusion, India’s plans to start semiconductor manufacturing mark a significant step towards achieving self-reliance in the technology sector. The move is expected to promote innovation, reduce the country’s dependence on imports, and strengthen the domestic semiconductor industry. With the Indian government’s support, the country has the potential to become a significant player in the global semiconductor industry and achieve its broader goal of self-reliance.