Context
A recent NITI Aayog report highlights the need for sustained investment, indigenous capabilities, and strategic partnerships to build a globally competitive semiconductor ecosystem in India.
About Semiconductors
- Semiconductors (chips) are materials whose conductivity lies between conductors and insulators.
- They are critical for electronics, automobiles, telecommunications, defence systems, industrial automation, and healthcare devices.
Semiconductor Value Chain
- Design – Development of chip architecture and integrated circuits.
- Fabrication (Fab) – Manufacturing chips on silicon wafers.
- ATMP – Assembly, Testing, Marking, and Packaging.
- Fabrication is the most capital-intensive and technologically advanced stage of the value chain.
India’s Semiconductor Ecosystem
- The India Semiconductor Mission (ISM) was launched with an outlay of ₹76,000 crore to develop a domestic semiconductor ecosystem.
- It supports:
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- Semiconductor and display fabrication units
- Compound semiconductor facilities
- Packaging and testing units
- Chip design and innovation
Current Status
- India’s semiconductor manufacturing ecosystem remains at a nascent stage, with multiple fabrication, packaging, and testing projects currently under development.
- India’s first semiconductor fabrication facility is under development at Dholera, Gujarat, and is expected to commence operations by 2028.
Key Takeaways from the Report
- Dependence on imported semiconductors poses risks to national security, critical infrastructure, and supply-chain resilience.
- Developing a globally competitive semiconductor ecosystem requires long-term capital, technological capabilities, and skilled human resources.
- India must strengthen capabilities in R&D, chip design, intellectual property, materials science, and advanced manufacturing.
- Priority areas include:
-
- Mature and strategically relevant technology nodes
- Compound semiconductors
- Packaging and testing
- Indigenous innovation and design
- Partnerships with the United States, Japan, the European Union, and South Korea can support technology access, research collaboration, and supply-chain security.
Challenges and Way Forward
| Challenges | Way Forward
|
| High capital requirements for fabrication facilities | Ensure sustained fiscal support and long-term investment |
| Dependence on foreign technology and intellectual property | Promote indigenous R&D and domestic IP creation |
| Shortage of specialised workforce | Expand semiconductor-focused skilling and industry-academia collaboration |
| Dependence on imported materials and components | Develop a domestic supplier ecosystem |
| Geopolitical and supply-chain disruptions | Diversify sourcing and strengthen partnerships with trusted countries |
| Infrastructure gaps for advanced manufacturing | Invest in semiconductor clusters and supporting infrastructure |
| Limited participation in advanced value-chain segments | Build capabilities in packaging, compound semiconductors, and niche semiconductor applications |
Conclusion
A robust semiconductor ecosystem is essential for India’s technological self-reliance, economic competitiveness, and strategic security. Sustained investment, indigenous innovation, skilled manpower, and strategic partnerships will be critical to strengthening India’s position in the global semiconductor value chain.
