India's burgeoning semiconductor startup ecosystem is increasingly looking towards Taiwan and South Korean foundries to scale their operations. This move comes as Indian startups aim to overcome challenges related to limited access to diverse foundry services and high costs associated with backend validation infrastructure.
Several factors are driving this trend. Firstly, the capital-intensive nature of the semiconductor industry, coupled with long development cycles and high-risk investments, makes it difficult for Indian startups to secure the necessary financial backing to establish domestic fabrication facilities. Secondly, while India possesses a significant pool of semiconductor design talent, it lags behind in specialized skills required for semiconductor fabrication and testing.
Taiwan, home to semiconductor powerhouses like TSMC and UMC, is recognized as the epicenter of chip manufacturing. Rising geopolitical tensions have encouraged Taiwanese companies to diversify their manufacturing bases, with India emerging as an attractive destination due to its growing electronics demand and supportive government policies. Similarly, South Korea, a global leader in memory chips and integrated circuits with companies like Samsung and SK Hynix, is also recognizing India's potential as a manufacturing partner.
Several collaborations between Indian entities and Taiwanese companies are already underway. For example, the Tata Group is partnering with Powerchip Semiconductor Manufacturing Corp (PSMC) to establish a semiconductor fabrication plant in Gujarat. Furthermore, Taiwanese investment in India has seen a significant surge in recent years.
To support the growth of the semiconductor industry, the Indian government has launched initiatives such as the India Semiconductor Mission (ISM) and the Design Linked Incentive (DLI) scheme. These programs aim to lower entry barriers by offering financial aid, access to advanced electronic design automation tools, and infrastructure support. Industry-government collaborations, such as the partnership between SmartSoC and CDAC, also play a crucial role by providing startups access to world-class post-silicon validation and characterization facilities.
Despite the challenges, India's ambition to become a global semiconductor hub remains strong. The government has set a target of securing a significant portion of the global semiconductor market, which is projected to exceed $1 trillion by 2030. By leveraging partnerships with global foundries, nurturing domestic talent, and providing a supportive policy environment, Indian chip startups are well-positioned to contribute to this goal.
