What’s the news?

• The second edition of Semicon India, hosted by the India Semiconductor Mission (ISM), comes at a pivotal moment for the global semiconductor industry.

Central idea

• As technology advances rapidly and geopolitical landscapes shift, India is determined to foster a thriving domestic ecosystem to achieve self-sufficiency and emerge as a key player in the global semiconductor value chain.

What is Semicon India?

• Semicon India is the annual conference organized by the India Semiconductor Mission (ISM).
• The primary objective of Semicon India is to promote the growth and development of the semiconductor industry in India.
• It provides an opportunity for the country to demonstrate its capabilities in semiconductor design and manufacturing while fostering networking and knowledge exchange among participants.

What are Semiconductors?

• Semiconductors are a class of materials that have unique electrical properties, making them intermediate in conductivity between conductors and insulators. They are a vital component in the manufacturing of various electronic devices and play a crucial role in modern technology.

India’s journey in the semiconductor industry

• Early Efforts: India’s initial forays into the semiconductor sector began with public sector undertakings like Bharat Electronics Ltd. (BEL) and some other labs and institutions attempting to establish a presence in the industry. However, despite promising starts, India faced difficulties in achieving the volume and technology needed for competitiveness.
• Missed Opportunities: Over the years, India encountered several missed opportunities that hindered its progress in the semiconductor field. One notable example is missing out on the Fairchild Semiconductor fab in the 1960s. Additionally, regulatory and bureaucratic hurdles prevented global semiconductor companies from showing interest in investing in India’s semiconductor manufacturing.
• Setbacks and Challenges: India’s major VLSI fabrication plant at the Semiconductor Complex Limited (SCL) in Chandigarh began production before Taiwan’s entry into semiconductor manufacturing. Unfortunately, a massive fire in 1989 led to the closure of the plant for many years, hampering India’s progress in the industry.
• Government Recognition: The Indian government came to recognize the economic and geopolitical significance of the semiconductor industry. Realizing the importance of achieving semiconductor self-sufficiency, the government launched the India Semiconductor Mission (ISM) to bolster the domestic ecosystem and position India as a key player in the global semiconductor value chain.

The birth of the India Semiconductor Mission (ISM)

• The India Semiconductor Mission (ISM) was launched as a significant initiative by the Indian government to bolster the semiconductor industry in the country.
• It came into existence with a clear vision of nurturing a thriving domestic semiconductor ecosystem to achieve self-sufficiency and elevate India’s position as a key player in the global semiconductor value chain.
• The mission’s proactive approach, combined with concrete policy interventions and political will, marks a new chapter in India’s journey in the semiconductor sector.

The significance of domestic semiconductor manufacturing for India

• Economic Growth: By manufacturing semiconductors domestically, India can reduce its dependence on imports, save foreign exchange, and contribute to economic growth by generating revenue and employment opportunities.
• Technological Advancement: Domestic semiconductor manufacturing enhances India’s capabilities in cutting-edge technologies, research, and development. It fosters innovation and facilitates the growth of other technology-driven sectors, including artificial intelligence, the Internet of Things (IoT), 5G, and advanced electronics. This, in turn, can boost India’s competitiveness on the global technology stage.
• Self-Reliance and Security: Developing a self-reliant semiconductor ecosystem ensures continuity in critical industries and safeguards against global disruptions. It also enhances India’s national security, as semiconductors play a vital role in defense and communication infrastructure.
• Attracting Investment: A strong semiconductor manufacturing ecosystem attracts both domestic and foreign investments. This leads to the establishment of semiconductor fabrication plants, research centers, and collaborations with global technology companies.
• Fostering Innovation: A thriving semiconductor industry encourages local innovation and entrepreneurship. It provides opportunities for startups and research institutions to develop innovative semiconductor technologies and solutions, positioning India as a global innovation hub.
• Digital Sovereignty: In an increasingly interconnected and digitally driven world, possessing domestic semiconductor manufacturing capabilities is vital for digital sovereignty. It allows India to control its critical technology infrastructure and data security, reducing its reliance on foreign technology providers.

Overwhelming global interest in India as a destination for semiconductor manufacturing

• Growing Market Potential: India’s large and rapidly growing economy presents a significant market for semiconductor products, attracting global semiconductor companies to establish a presence in the country.
• Government Support and Vision: The Indian government’s clear vision and commitment to nurturing a thriving domestic semiconductor ecosystem through initiatives like the India Semiconductor Mission (ISM) have instilled confidence among global players.
• Strategic Importance: Policymakers in India recognize the strategic significance of a robust domestic semiconductor industry for economic growth, safeguarding domestic industries, and ensuring national security.
• Urgency of Semiconductor Self-Reliance: The global semiconductor shortage and disruptions in supply chains have highlighted the urgency of achieving semiconductor self-reliance, making India an attractive location for semiconductor manufacturing.
• Fiscal Incentives and Regulatory Support: The Indian government’s unprecedented commitment to fiscal incentives and regulatory support has drawn significant interest from semiconductor companies globally.
• Skilled Workforce: India’s large pool of skilled engineers and technical talent offers an advantageous workforce for semiconductor companies looking to establish operations in the country.
• Collaboration with Global Partners: Collaborative agreements with countries like the US and Japan in semiconductor development, research, design, and talent development have enhanced India’s appeal as a semiconductor manufacturing hub.
• Focus on Sustainability: India’s emphasis on sustainable semiconductor manufacturing through green technologies and resource-efficient practices aligns with the global push for environmentally responsible production.
• Long-term Support and Progress under ISM: The Indian government’s commitment to long-term support for the semiconductor industry, as demonstrated through initiatives like the Design Linked Incentive (DLI) scheme and modernization of facilities, has garnered attention.
• Potential for Innovation: India’s thriving innovation ecosystem, including startups and research institutions, presents opportunities for collaborative innovation and technological advancements in the semiconductor industry.

Conclusion

• From missed opportunities to a thriving domestic ecosystem, India’s progress in the semiconductor industry is a global case study in building sectors from scratch through appropriate policy interventions and political will. India is now on track to lead the global race in the semiconductor value chain. The ISM reflects India’s determination to achieve semiconductor self-sufficiency and emerge as a major player in the global semiconductor industry.

Also read:

Semiconductor Fabrication in India: Learning from Past Attempts and Embracing Alternate Approaches

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