Exploring a fresh Silicon pathway: India’s strategy to secure 10% of the worldwide chip market by 2030
India’s semiconductor goals are picking up speed with heightened investment and strategic collaborations. The government has increased funding for chip projects, targeting 10% of worldwide chip demand by 2030. A significant partnership between Tata Electronics and PSMC will create India’s first 12-inch wafer fabrication facility in Gujarat, generating employment and decreasing import reliance.
Introduction
India is embarking on an ambitious journey to establish itself as a significant player in the global semiconductor industry. With the objective of capturing 10% of the worldwide chip market by 2030, the nation is implementing a multifaceted strategy encompassing policy reforms, substantial investments, infrastructure development, talent cultivation, and international collaborations. This comprehensive approach aims to transform India into a global semiconductor hub, reducing dependency on imports and enhancing technological self-reliance.
The Imperative for a Semiconductor Ecosystem in India
A. Strategic Significance
Semiconductors are the backbone of modern technology, integral to industries such as telecommunications, defense, automotive, healthcare, and consumer electronics. India’s heavy reliance on imported chips poses risks to national security and economic stability. Establishing a robust domestic semiconductor ecosystem is crucial for:
Technological Sovereignty: Reducing dependency on foreign chip manufacturers.
Economic Growth: Stimulating high-tech manufacturing and creating employment opportunities.
Global Competitiveness: Positioning India as a key player in the global technology supply chain.
B. Market Potential
India’s semiconductor market, valued at $45 billion in 2023, is projected to surpass $100 billion by 2030, driven by:
Digital Transformation: Expansion of digital infrastructure across sectors.
Consumer Demand: Growth in mobile handset, IT, and telecom segments, contributing over 75% of semiconductor revenues.
Government Initiatives: Programs like ‘Digital India’ and ‘Make in India’ promote electronic manufacturing.
II. Policy Framework and Government Initiatives
A. India Semiconductor Mission (ISM)
Launched in December 2021 with an allocation of ₹76,000 crore (~$9.1 billion), the ISM aims to:
Launched in December 2021 with an allocation of ₹76,000 crore (~$9.1 billion), the ISM aims to:
Establish Semiconductor and Display Fabs: Providing financial incentives covering up to 50% of project costs.
Develop Infrastructure: Supporting the creation of high-tech clusters and research facilities.
Foster Innovation: Encouraging R&D in semiconductor technologies.
B. Production-Linked Incentive (PLI) Scheme
The PLI scheme offers incentives to companies for:
Manufacturing Excellence: Enhancing domestic production capabilities.
Export Promotion: Encouraging companies to serve global markets.
Investment Attraction: Drawing foreign and domestic investments into the semiconductor sector.
III. Infrastructure Development and Key Projects
A. Semiconductor Fabrication Facilities
Significant projects approved include:
Tata Electronics and Powerchip Semiconductor Manufacturing Corp (Taiwan): Establishing a ₹91,000 crore fab in Dholera, Gujarat, with a capacity of 50,000 wafer starts per month.
Tower Semiconductor (Israel) and Adani Group: Planning a $10 billion facility in Maharashtra with an initial capacity of 40,000 wafers per month.
B. Assembly, Testing, Marking, and Packaging (ATMP) Units
Key ATMP projects:
Tata Semiconductor Assembly and Test Pvt. Ltd. (TSAT): Setting up a ₹27,000 crore facility in Jagiroad, Assam, expected to produce 48 million chips per day.
Micron Technology: Investing ₹22,516 crore in an ATMP unit in Sanand, Gujarat.
II. Policy Framework and Government Initiatives
A. India Semiconductor Mission (ISM)
Launched in December 2021 with an allocation of ₹76,000 crore (~$9.1 billion), the ISM aims to:
Launched in December 2021 with an allocation of ₹76,000 crore (~$9.1 billion), the ISM aims to:
Establish Semiconductor and Display Fabs: Providing financial incentives covering up to 50% of project costs.
Develop Infrastructure: Supporting the creation of high-tech clusters and research facilities.
Foster Innovation: Encouraging R&D in semiconductor technologies.
B. Production-Linked Incentive (PLI) Scheme
The PLI scheme offers incentives to companies for:
Manufacturing Excellence: Enhancing domestic production capabilities.
Export Promotion: Encouraging companies to serve global markets.
Investment Attraction: Drawing foreign and domestic investments into the semiconductor sector.
IV. Talent Development and Skill Enhancement
A. Addressing the Skill Gap
The Indian semiconductor industry faces a potential shortage of 250,000–300,000 skilled professionals by 2027. To mitigate this:
Technical Bootcamps: Companies like Micron India are conducting bootcamps focusing on design and verification skills.
University Collaborations: AMD India is partnering with academic institutions to train students in next-generation technologies.
Semiverse Solutions: Lam Research aims to upskill 60,000 engineers over the next decade through partnerships with universities.
B. Indigenous Processor Development
Initiatives like SHAKTI and VEGA microprocessors, developed by IIT Madras and C-DAC respectively, are fostering homegrown capabilities in processor design, aligning with the ‘Atmanirbhar Bharat’ vision.
V. International Collaborations and Strategic Partnerships
India is engaging in global partnerships to bolster its semiconductor ambitions:
United States–India Initiative on Critical and Emerging Technology (iCET): Enhancing cooperation in semiconductors, AI, and quantum computing.
Corporate Collaborations: Agreements with companies like Analog Devices and NXP Semiconductors to establish manufacturing and R&D facilities in India.
VI. Challenges and Mitigation Strategies
A. Infrastructure and Supply Chain Constraints
Challenges:
Utility Infrastructure: Ensuring a reliable power and water supply.
Supply Chain Development: Building upstream and downstream capabilities.
Mitigation:
Government Support: Providing incentives and facilitating infrastructure development.
Private Sector Participation: Encouraging investments in ancillary industries.
B. Global Competition
China’s aggressive expansion in the semiconductor sector poses a competitive challenge. India’s strategy focuses on:
Niche Specialization: Targeting specific segments like mature-node chips.
Quality and Reliability: Emphasizing high standards to attract global clients.
VII. Roadmap to Achieve 10% Global Market Share by 2030
To realize its goal, India must:
Accelerate Project Implementation: Ensure timely completion of approved facilities.
Enhance R&D Investment: Promote innovation through increased funding.
Strengthen Talent Pipeline: Expand training programs and academic collaborations.
Foster Global Partnerships: Leverage international expertise and markets.
Conclusion
India’s concerted efforts to establish a comprehensive semiconductor ecosystem reflect its commitment to technological self-reliance and economic advancement. By addressing infrastructural challenges, cultivating talent, and fostering international collaborations, India is poised to emerge as a significant player in the global semiconductor industry, achieving its target of capturing 10% of the market by 2030.
UPSC Mains exam-based short answer questions (around 150–200 words each) derived from the topic “Exploring a Fresh Silicon Pathway: India’s Strategy to Secure 10% of the Worldwide Chip Market by 2030”:
Question 1: Discuss the key policy initiatives undertaken by the Government of India to promote the domestic semiconductor industry. How do these initiatives aim to position India in the global chip market by 2030?
Question 2: Analyze the major challenges India faces in its journey to become a global semiconductor hub. Suggest suitable measures to overcome these obstacles.
( Source – The Economic Times Newspaper)