Semiconductors are rapidly becoming a crucial component in India's ambition to strengthen its eco-tech security and establish itself as a significant force in the global technology landscape. This vision is gaining momentum, with substantial investments, strategic government initiatives, and the collaborative spirit of industry leaders who recognize the transformative potential of domestic semiconductor manufacturing.
The inauguration of CG Semi's advanced Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, marks a pivotal moment in India's journey toward semiconductor self-reliance. Union IT Minister Ashwini Vaishnaw emphasized the significance of this achievement, noting that the first "Made in India" chip will soon be dedicated to the nation by Prime Minister Narendra Modi. This milestone aligns with the Prime Minister's vision of positioning India as a global hub for semiconductor manufacturing, attracting investments, and fostering a skilled workforce.
CG Power Chairman Vellayan Subbiah highlighted the strategic importance of semiconductors, drawing a parallel to JRD Tata's pioneering efforts in steel production. He emphasized that semiconductors are the "new steel," essential for India's medium-term economic and technological security. Subbiah's perspective underscores the need for India to develop a comprehensive semiconductor ecosystem to drive manufacturing growth and reduce reliance on imports.
The Indian government has demonstrated a strong commitment to fostering the semiconductor industry through various initiatives and policy support. The India Semiconductor Mission (ISM), launched with an outlay of ₹76,000 crore, serves as the nodal agency for implementing semiconductor schemes and attracting investments. The government offers fiscal support of up to 50% of the project cost for setting up semiconductor fabs and assembly units. These incentives have attracted significant investments from both domestic and international companies.
Several projects are underway to establish a robust semiconductor ecosystem in India. Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat, and an OSAT facility in Morigaon, Assam. Micron Technology is investing over $2.75 billion in setting up an ATMP plant. Kaynes Technology India is also establishing an OSAT plant and expects to begin commercial shipments of chips in the fourth quarter of the current financial year. These projects, along with CG Semi's OSAT facility, are expected to generate employment opportunities for skilled professionals and catalyze the electronics manufacturing ecosystem.
India's semiconductor market is projected to experience substantial growth in the coming years. Valued at approximately US$38 billion in 2023, it is expected to reach US$45-50 billion by the end of 2025 and US$100-110 billion by 2030. This growth trajectory underscores India's strategic focus on becoming a key player in the global semiconductor value chain. The government aims to capture a significant share of the projected US$1 trillion global semiconductor market by 2030 through policy initiatives and investments.
To support the growth of the semiconductor industry, India is also focused on developing a skilled workforce. The government has partnered with approximately 270 universities to provide access to advanced chip design tools. This initiative aims to address the looming global workforce shortage in the semiconductor sector and ensure that India has a talent pool to meet the demands of the industry.
While India has made significant strides in recent years, it is important to acknowledge the challenges that lie ahead. The semiconductor industry is capital-intensive and requires advanced technology and infrastructure. India needs to continue to invest in research and development, attract foreign expertise, and create a conducive environment for innovation to overcome these challenges.
With strategic initiatives, policy support, and collaborative efforts from industry leaders, India is well-positioned to emerge as a major player in the global semiconductor market. The focus on developing a comprehensive ecosystem, fostering talent, and attracting investments will pave the way for India to achieve its vision of becoming a self-reliant and technologically advanced nation. The semiconductor industry will serve as the "new steel," driving economic growth, enhancing eco-tech security, and transforming India into a global technology powerhouse.
