India's Electronics and Information Technology Minister, Ashwini Vaishnaw, has detailed the nation's ambitious strategy to build a comprehensive semiconductor ecosystem. Over the past five years, India has approved 12 semiconductor units, attracting a cumulative investment of $20 billion, with three units already commencing commercial production.
From Electronics Manufacturing to a Full Semiconductor Ecosystem
Vaishnaw emphasized that India is moving beyond mere electronics assembly to establish a foundational semiconductor industry. He highlighted the critical role of chips, which power everything from mobile phones and cars to drones and MRI machines. The global electronics industry, valued at an estimated $4.3 trillion, underscores the strategic importance of this sector.
The COVID-19 pandemic starkly exposed vulnerabilities in global chip supply chains, prompting countries worldwide to prioritize domestic semiconductor development. India's renewed focus aims to ensure self-reliance and bolster its position in the global technology landscape.
Overcoming Past Challenges in Chip Production
India's journey into semiconductor manufacturing dates back to the 1960s, with early attempts by companies like Fairchild Semiconductor. However, these efforts were hampered by socialist economic policies and production quotas. Subsequent decades saw similar initiatives falter due to strategic missteps and execution issues, including instances where imported equipment was turned away by customs.
A significant shift began with the "Make in India" initiative, introducing reforms in foreign direct investment, taxation, and customs duties. These measures laid robust groundwork, transforming India into a major electronics manufacturing hub. Today, the country boasts over 300 electronics manufacturing units, producing goods worth over $130 billion and achieving exports exceeding $48 billion. Mobile phones have emerged as India's leading export item, supporting 2.5 million jobs.
The Semicon India Programme and Rapid Progress
Launched in 2021 with a $10 billion package, the Semicon India programme aimed to support fabrication plants (fabs) and packaging units. Despite initial industry skepticism regarding India's commitment and capacity to handle the complexities of chip manufacturing—such as building clean rooms or managing ultrapure water and lithography machines—the programme has achieved substantial progress.
Five years on, 12 units are approved with a combined investment of $20 billion. Three, including facilities by Micron, Kaynes, and CG Power, have already begun commercial production, with others under construction. This success has shifted global perceptions from skepticism to "curiously optimistic."
Cultivating a Skilled Chip Design Workforce
Recognizing the need for specialized talent, particularly in chip design, the government initially targeted training 85,000 skilled engineers over a decade. Initiatives like the "Chips to Startup" programme provide electronic design automation tools to over 320 universities and startups, fostering innovation. At a recent Semicon India event, 40 chips designed by Indian students were showcased to the Prime Minister.
Major semiconductor design companies now have substantial operations in India, with local designers actively working on advanced 2-nm and 3-nm process nodes. The Design Link Incentive scheme has further supported 105 startups, providing $83 million in financial aid to 24 of them, which subsequently attracted $118.5 million in venture capital funding.
Semicon 2.0: Expanding India's Semiconductor Ambitions
The newly announced Semicon 2.0 outlines seven key focus areas. These include expanding chip design capabilities across various domains (compute, memory, RF, power, networking, sensors), supporting domestic production of manufacturing equipment, and building capacity for the 150-500 specialty chemicals and materials essential for chipmaking. The programme will also continue backing advanced packaging and new fabs.
In research, India aims to strategically advance from its current 40-nm technology to 7-nm and 3-nm nodes within eight years, alongside training 100,000 chip design engineers. Vaishnaw stated, "Just like the IT sector, we want India to become the semiconductor design capital of the world."
He also defended India's focus on developing legacy technologies initially, stating, "One must learn to walk before sprinting in a full marathon." He noted that countries developing 2-nm technology have decades of experience, while India's current concentrated effort is only five years old, marking a strong beginning.