India's burgeoning semiconductor industry is poised for a significant transformation, moving beyond its traditional role in IT outsourcing. According to Gilroy Mathew, Chief Operating Officer of AI and technology solutions company UST, the nation's biggest opportunity lies in advanced chip design, packaging, and embedded systems engineering, rather than merely providing low-value services.
Mathew emphasized that while artificial intelligence (AI) dominates current discussions, the foundational battle for technological control will ultimately be fought in semiconductors. As global demand for AI infrastructure and connected devices surges, control over silicon determines the efficiency, scalability, and economic power of future technology eras. He views semiconductors and AI not as competing priorities but as deeply interdependent layers.
A Strategic Shift for India's Tech Sector
The current semiconductor opportunity is fundamentally different from previous technology waves like outsourcing or cloud computing. Mathew highlighted it as a strategic manufacturing, design, and national capability opportunity, rather than just another services play. This marks a pivotal moment for India to build lasting intellectual property and platform value, areas where it previously lagged during earlier tech transitions.
“The semiconductor opportunity is very different from outsourcing, cloud, or digital transformation because it is not only a services opportunity, it is a strategic manufacturing, design, and national capability opportunity,” Mathew stated.
UST itself has significantly invested in this shift. Starting with a small engineering team in 2009, the company acquired VLSI services firm SeviTech Systems in 2018 to bolster its pre-silicon design capabilities. By 2023-24, UST was supporting 35 leading semiconductor companies globally. In late 2025, UST partnered with Kaynes Semicon to establish a significant Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, reflecting its commitment to India's semiconductor ambitions.
Capitalizing on Design Talent and Packaging Ambitions
India currently boasts nearly 20% of the world’s chip design engineers, providing a robust foundation in design and engineering talent. While large-scale fabrication remains a long-term goal due to its capital intensity, India's immediate strengths lie in chip design, advanced packaging (OSAT/ATMP), and embedded systems.
The India Semiconductor Mission (ISM) has already approved multiple manufacturing and OSAT projects, with government incentives and private sector investments moving into execution. However, Mathew cautioned against repeating past patterns of competing solely on cost and scale. Long-term success, he advised, will stem from building trust, specialized expertise, reusable engineering assets, and delivering critical programs with global quality standards.
Integrating Hardware and Software for Global Leadership
Mathew also acknowledged the impact of AI-driven automation on parts of the IT services industry, particularly repetitive, effort-based tasks like application maintenance and manual testing. He predicts a shift towards more complex, engineering-led work that AI cannot easily commoditize.
For India, the ultimate long-term opportunity lies in integrating its strong software capabilities with emerging semiconductor strengths to create end-to-end solutions. This involves not just designing chips, but enabling intelligent systems where hardware, embedded software, and cloud-native capabilities converge seamlessly. Such ecosystem investments, including those by UST in Kaynes Semicon, are crucial for building lasting semiconductor depth and achieving global leadership.