India's Ambitious Leap into Semiconductor Manufacturing
In a world increasingly reliant on technology, the need for computer chips is more critical than ever. India, with its rich pool of engineering talent, is now making strides to secure its place in the global semiconductor industry. This move comes on the heels of disruptions caused by the COVID-19 pandemic, which highlighted the vulnerabilities of global supply chains. As companies worldwide grapple with the consequences of these disruptions, India is working to establish a more resilient semiconductor ecosystem. Here's a look at how the country is positioning itself within this vital sector.
The semiconductor industry is at the heart of modern technology, powering everything from smartphones to advanced computing systems. India is home to approximately 20% of the world's semiconductor engineers, showcasing its strength in chip design. However, while India possesses significant design capabilities, it has historically lagged in manufacturing. The COVID-19 pandemic exposed this gap, as supply chain disruptions led to widespread production halts across various industries, underscoring the urgent need for India to develop its own manufacturing capabilities.
In response to these challenges, the Indian government has taken proactive steps to foster an environment conducive to semiconductor manufacturing. Amitesh Kumar Sinha, a senior official in the Ministry of Electronics and Information Technology, emphasizes that the pandemic underscored the risks associated with concentrated semiconductor manufacturing in specific regions, particularly in Taiwan and China. To mitigate these risks, India is committed to building its own semiconductor ecosystem, which includes identifying competitive areas within the production process.
One of the critical stages of semiconductor production is wafer fabrication, where silicon wafers are etched with intricate circuits. This process requires substantial investment and advanced technology, which has historically been dominated by a few key players globally. However, India is shifting its focus toward the assembly, testing, and packaging of semiconductors, a part of the production chain that is considered more accessible to enter. Ashok Chandak, president of the India Electronics and Semiconductor Association, notes that several plants dedicated to these processes are expected to begin mass production soon.
Kaynes Semicon, founded in 2023, marks a significant milestone in India's semiconductor journey. The company has invested $260 million to establish a facility in Gujarat that specializes in assembling and testing chips. Raghu Panicker, the CEO of Kaynes Semicon, explains that the packaging of semiconductors is a complex process that involves multiple steps, making it as vital as the chip manufacturing itself. Although the chips produced at this facility will not be among the most advanced types used in cutting-edge applications like artificial intelligence, they are crucial for sectors such as automotive, telecommunications, and defense.
The Indian government is also incentivizing semiconductor manufacturing through various initiatives. The Production-Linked Incentive (PLI) scheme, for instance, aims to boost domestic production by offering financial incentives to companies that meet specific production targets. This scheme is designed to attract both domestic and foreign investment in semiconductor manufacturing, thereby creating local jobs and reducing dependence on foreign suppliers.
The need for training personnel who understand the stringent requirements of semiconductor production is a significant challenge. Panicker acknowledges the steep learning curve involved in establishing a semiconductor production facility in India, noting that the country has little prior experience in creating cleanroom environments essential for chip manufacturing. He emphasizes that training cannot be rushed, as developing expertise in this field typically takes years. This highlights the importance of educational institutions and training programs to prepare a skilled workforce capable of supporting the semiconductor industry.
Back in Bangalore, Arnob Roy eagerly anticipates the day when homegrown semiconductor manufacturing will be a reality. He believes that the growth of a domestic semiconductor industry will directly benefit companies like Tejas Networks, allowing them to source components locally and reduce reliance on international suppliers. Roy envisions a future where Indian firms can design and manufacture complete telecom chipsets, although he acknowledges that this goal will require time and patient investment.
As India embarks on this ambitious journey to establish a semiconductor industry, the country is not just looking to become a player in a global market; it is also aiming to build a self-sufficient ecosystem that can support its growing technological needs. The process will not be swift, and challenges remain, but the commitment to developing local capabilities reflects a strategic shift in how India approaches technology and manufacturing.
The semiconductor industry is vital for the future of many sectors, and India's efforts to strengthen its position in this field could have far-reaching implications. With a growing demand for semiconductors in various applications, from consumer electronics to advanced telecommunications, the emergence of a robust domestic industry could not only bolster India's economy but also enhance its global standing in technology. Furthermore, as nations seek to secure their supply chains, India's initiative to develop its semiconductor capabilities can be seen as a step toward technological independence and national security.
As the world watches, India is poised to transform its semiconductor landscape, aiming for a future where it can compete on equal footing with established players in the industry. With the right investments, training, and strategic focus, India could soon become a significant contributor to the global semiconductor supply chain, reshaping the dynamics of technology production and consumption.