India Emerges as a Viable Alternative in the Global Semiconductor Value Chain; Industry Highlights Advantages

Three significant semiconductor projects worth an estimated Rs 1.26 lakh crore were authorized by the Cabinet last week. They would be located in Gujarat and Assam. The action is being taken at a time when, according to research by the Information Technology and Innovation Foundation (ITIF), India is ready to increase its influence in global semiconductor value chains.

India has the ability to greatly increase its footprint in the semiconductor sector, as the paper “Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains” highlights. The paper recommends that India make use of its capabilities in electronics manufacturing and global supply chain rebalancing, together with its large and expanding consumer and corporate market, to strengthen its position in global semiconductor value chains.

The ITIF research states that over the next five years, India may build up to five semiconductor assembly, testing, and packaging (ATP) facilities in addition to drawing fabs that produce legacy semiconductors at 28 nm or above. This development would make use of India’s vast expertise in semiconductor design, where it now employs over 125,000 people and makes up 20% of the global workforce in integrated circuit (IC) design.

However, there is a worldwide talent shortage in the semiconductor business. Though more than 800,000 engineers graduate from India each year, only a few are considered industry-ready. The paper highlights the need for improved education, training, and readiness in order to close this gap and take advantage of India’s engineering talent pool. Therefore, the industry feels that India is well-positioned to improve its technical skills and increase the size of its talent pool, especially because big chip makers have shown interest in the country and its policies are helpful.

THE PERSPECTIVE OF INDIA
In an interview with News18, Sanjay Gupta, the head of the India Electronics and Semiconductor Association (IESA), discussed the study and the semiconductor ecosystem, emphasizing how vibrant it is in the nation.

Gupta pointed out that a number of players are actively interacting with the ecosystem, such as software developers, semiconductor manufacturers, and electrical corporations. He emphasized that a broad variety of businesses, including chemical and gas firms, are involved in India’s semiconductor production, highlighting the ecosystem’s comprehensiveness.

“While countries like Singapore, Korea, Hong Kong, Japan, and Malaysia excel in logistics and infrastructure, India offers unique advantages, including its demographic profile and scalability,” Gupta said, pointing to India’s emergence as a viable alternative in the global semiconductor value chain.

Gupta said that India is positioned to play a significant role in the semiconductor sector because of its capacity to grow and the fact that it is expected to remain the youngest nation in the world for the next forty years. In the meantime, Gupta listed ten essential elements for semiconductor production, including steady supplies of water and energy, a strong logistical network, talent availability, and government backing for visas and clearances.

Additionally, he emphasized how India has always maintained stable policies, inspiring confidence in the country among international investors. He emphasized that one of the main elements that support policy stability and draw significant investments is strong leadership in the government.

He emphasized the importance of India’s local market in increasing semiconductor usage when discussing the study. He made the argument that, in contrast to other nations, India’s economy is well-positioned to grow via domestic spending. He emphasized that India has the ability to develop a self-sufficient semiconductor sector that meets domestic demands, given estimates showing a significant increase in the nation’s semiconductor consumption. He said that by doing this, the Indian economy would become less dependent on imports and would be more stable since fiscal deficits and currency depreciation concerns would be reduced.

In line with Gupta’s observations, Ashok Chandak, president of IESA, added: “The current juncture presents a unique opportunity for the establishment of semiconductor manufacturing in India given its rapidly expanding domestic market, a well-developed design ecosystem, supportive government policies, and concerted industry collaboration to tap global markets.” The paper highlights India’s remarkable advancements in leveraging its strong semiconductor design ecosystem to become a leading location for electronics and semiconductor production.

The report also intends to provide guidance to the government regarding efforts to strengthen commercial ties between the United States and India in the semiconductor industry. It also draws attention to the fact that companies have been adopting a “China-plus-one” or “China plus two” strategy in recent times in order to increase the resilience of their supply chains.

“This is an exciting moment in history for the semiconductor industry and for strategic cooperation between the US and India,” said John Neuffer, president and CEO of the Semiconductor Sector Association (SIA). India has the potential to increase its influence in our industry and is now a significant link in the global semiconductor supply chain. India has a compelling value offer despite the intense global rivalry for semiconductor investment.

All things considered, it is recognized that India is well-positioned to increase its presence in the international semiconductor value chains, supporting the nation’s technical development and economic expansion with the help of government and industry cooperation.