In ten years, through a structured PPP approach, India can transform from a semiconductor importer to a significant producer and innovator. First and foremost, India must leverage its strength in semiconductor design (Indian engineers already account for ~20% of the world’s chip design talent) by creating R&D hubs through Public Private partnership. The government has launched Design-Linked Incentive (DLI) scheme to support fabless startups – already many startups have received funding by 2024 under this program, but it needs further augmentation considering the huge potential of Intellectual property creation by allowing to sustain during long gestation period. India should embark a roadmap with three phases: setup, scale, and consolidate in every aspect of this industry and not OSAT alone. The country’s semiconductor clusters thus formed will form the backbone of a self-reliant electronics supply chain. Key actionable recommendations for this transformation include:
Continue Sustained Funding and Incentives: Maintain robust financial support in early years (with ~$10billion already committed) to attract anchor projects but plan a path to reduce subsidies as the ecosystem matures. Introduce Semicon India 2.0 with targeted incentives for advanced tech and R&D to keep the momentum. Leverage state incentives to complement central support, as seen in Gujarat and UP.
Focus on Cluster Development and Infrastructure: Concentrate development in a few high-impact clusters rather than spreading too thin, as recommended by global best practices. Build these fab and fabless/design clusters with world-class infrastructure (high speed lab equipments, test-beds, power, water, cleanrooms) and integrate suppliers, academia, and housing to create self-sustaining “semiconductor cities.” Use special zones and science parks to provide one-stop support and tax benefits, following models of Taiwan and Oregon, USA .
Strengthen the Entire Value Chain: Simultaneously develop upstream and downstream capabilities – encourage material suppliers (wafers, gases, chemicals) and equipment support units to co-locate, and boost downstream activities like chip testing and packaging. This also applies to EDA tools and silcion IPs which are key to fabless/design value chain. The Odisha policy’s approach of incentivizing both fabs and fabless/design companies in tandem is a good example. Aim for increasing local content in the supply chain each year, reducing import dependency step by step.
Invest in Talent and Skills at Scale: Rapidly expand training programs (building on Chips-to-Startup’s 85k engineers goal) to create a pipeline of industry-ready talent. Set up a dedicated Semiconductor Training Institute and upgrade curricula nationwide in partnership with industry. Involve global partners in training – e.g., send top Indian engineers to train at TSMC, Intel, etc., and bring experienced trainers to India to meet the ~10k specialized workforce need by 2027. Make semiconductor careers attractive to retain talent: offer scholarships, clear career paths, and opportunities to work on cutting-edge projects in India.
Enhance R&D and Encourage Innovation: Establish collaborative R&D centers (PPP research labs) to innovate in areas like new materials, AI chips, and next-gen fabrication. Provide grants or tax credits for companies investing in local R&D. Protect and leverage IP – improve patent processes and perhaps create an IP Commons platform for easy licensing of non-competitive IP among Indian players. Protecting intellectual property is paramount to encourage innovation; a robust IP policy (fast-track patenting, design protection, and enforcement) is being formulated to safeguard chip designs and encourage patent filings. (India currently ranks only 24th globally in semiconductor-related patent filings, underscoring the need for stronger IP regimes. Foster startup culture through incubators (building on efforts like the Electropreneur Park at DU) and access to expensive EDA tools via government-supported infrastructure.
Optimize Policy and Regulatory Environment: Ensure policies are transparent, predictable, and globally aligned. Continue easing business procedures: simplify import/export, offer tax holidays, and ensure contract enforceability. Implement strong IP protection laws to give confidence to investors (the need for a sturdy IP policy is critical for sustained innovation). Coordinate central and state policies so they are complementary – use a hub-and-spoke model where central policy provides the framework and states compete within that for projects. Keep engaging industry leaders through the empowered committee mechanism to get feedback and adjust policies in real time.
Deepen Global Partnerships: Proactively engage with countries strong in semiconductors – US, Japan, Taiwan, South Korea, EU – for technology transfer, investments, and market access. Sign MoUs focusing on talent exchange, joint ventures, and supply chain security (as done with Japan and the US ). Use diplomatic channels to integrate India into global chip supply networks (for example, secure lithography equipment supply through Netherlands/Japan relationships). Additionally, leverage India’s large market as a bargaining chip to bring manufacturing here – assure global firms that by investing in India, they also gain preferential access to India’s growing electronics market (projected to be 10% of world demand by 2030).
Monitor Progress with Milestones: Implement a clear timeline with checkpoints. For instance, by 2025 have first chip assembly output from a new plant, by 2026 have the first fab’s cleanroom ready, by 2027 produce first made-in-India 28nm chips, by 2030 have multiple hubs and at least 50% of demand met internally. Regularly publish updates (as ISM is doing) to maintain transparency and investor confidence. Holding annual Semicon India events to take stock and announce new initiatives will keep the momentum and public focus.
By rigorously executing a phased approach, India can build a globally competitive semiconductor industry within a decade. The short-term foundation will instill confidence, the medium-term expansion will establish capacity and ecosystem depth, and the long-term consolidation will secure India’s place among the leading semiconductor nations. The PPP cluster model – combining government support, private sector efficiency, academic innovation, and global collaboration – is the catalyst that will drive this transformation, ultimately positioning India not just as a semiconductor manufacturing base but as an innovation powerhouse in the semiconductor domain.
Reference:
Government Policies & Reports
- Semicon India Program (2021)
- Production Linked Incentive (PLI) Scheme (2020)
- National Policy on Electronics & Semiconductor Roadmaps
Industry Reports & Whitepapers
- McKinsey & Company – “The Semiconductor Decade” (2021)
- Semiconductor Industry Association (SIA) – 2023 Factbook & Reports
- Invest India – Semiconductor Market Outlook (2023)
- KPMG / EY / Deloitte – Industry Insights
- India Electronics & Semiconductor Association (IESA) Reports
Company Announcements & Investment News
- Tata Electronics (TEPL) – Fab and OSAT Projects
- Micron Technology – India ATMP Facility
- Vedanta-Foxconn Joint Venture
- Foxconn (Hon Hai) – Ongoing Plans
- Intel Corporation – Statements on India
Other Notable Announcements:
- AMD’s $400M investment in India
- International Collaborations & Trade Agreements
- U.S.–India Partnerships: Memorandum of Understanding on Semiconductor Supply Chain and Innovation Partnership
- India–Japan Semiconductor Cooperation
- India–European Union (EU) Collaboration
