{"id":345708,"date":"2025-09-04T11:11:46","date_gmt":"2025-09-04T05:41:46","guid":{"rendered":"https:\/\/forumias.com\/blog\/?page_id=345708"},"modified":"2025-09-04T11:11:46","modified_gmt":"2025-09-04T05:41:46","slug":"answered-india-aims-to-become-a-competitive-semiconductor-hub-by-building-a-full-value-chain-examine-the-challenges-and-policy-imperatives-in-achieving-technological-self-reliance-and-economic-grow","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-india-aims-to-become-a-competitive-semiconductor-hub-by-building-a-full-value-chain-examine-the-challenges-and-policy-imperatives-in-achieving-technological-self-reliance-and-economic-grow\/","title":{"rendered":"[Answered] India aims to become a competitive semiconductor hub by building a full value chain. Examine the challenges and policy imperatives in achieving technological self-reliance and economic growth in this strategic sector."},"content":{"rendered":"

Introduction<\/strong><\/h2>\n

Global semiconductor revenues crossed $600 billion in 2022 (SEMI Report)<\/strong>, underscoring their role as the \u201coil of the digital age.\u201d India\u2019s ambition to build a full value chain is central to Atmanirbhar Bharat.<\/p>\n

Semiconductors: A Strategic Sector<\/strong><\/h2>\n
    \n
  1. Backbone of AI, 5G, EVs, defence, space, healthcare<\/strong>, and Industry 4.0.<\/li>\n
  2. India consumes $30+ billion worth of chips annually but imports nearly 100% of finished semiconductors (MeitY, 2024)<\/strong>.<\/li>\n
  3. Pandemic-induced shortages exposed vulnerabilities, affecting India\u2019s auto and electronics sectors, costing billions.<\/li>\n<\/ol>\n

    Current Progress in India<\/strong><\/h2>\n
      \n
    1. India Semiconductor Mission (ISM):<\/strong> \u20b976,000 crore PLI scheme supporting fabs, OSAT (outsourced semiconductor assembly and testing), and design.<\/li>\n
    2. 10 fabs approved<\/strong>, pilot line already functioning at Sanand (Gujarat)<\/strong>; SCL Mohali being modernised.<\/li>\n
    3. Design strength:<\/strong> India houses 20% of global chip design talent<\/strong>, with 60,000+ engineers trained on Electronic Design Automation tools.<\/li>\n
    4. Start-ups:<\/strong> Mindgrove (IoT chips, IIT-Madras\u2019 SHAKTI processor), Netrasemi (\u20b9107 crore VC funding).<\/li>\n
    5. Global investment:<\/strong> Applied Materials, Lam Research, AMD, and Merck committing over $1.1 billion for R&D.<\/li>\n
    6. International collaborations:<\/strong> US, Japan, Taiwan, EU under CHIPS4 alliance<\/strong> and India\u2013US iCET partnership.<\/li>\n<\/ol>\n

      Challenges in Building a Full Value Chain<\/strong><\/h2>\n
        \n
      1. Capital Intensity:<\/strong> Setting up a fab costs $5\u201310 billion<\/strong>, with long payback periods.<\/li>\n
      2. Technological Dependence:<\/strong> Advanced lithography machines are monopolised by ASML (Netherlands)<\/strong>; India lacks indigenous capability.<\/li>\n
      3. Supply Chain Fragility:<\/strong> Dependence on Taiwan, Korea, and Japan for raw wafers, chemicals, rare earths.<\/li>\n
      4. Talent Shortage:<\/strong> Global shortage of 1 million chip professionals by 2030 (SEMI), India must scale beyond design to manufacturing expertise.<\/li>\n
      5. Energy & Infrastructure Needs:<\/strong> Fabs require stable 24×7 power, ultra-pure water, and high-class logistics<\/strong>, still inconsistent in India.<\/li>\n
      6. Geopolitical Pressures:<\/strong> US-China tech war, export controls, and CBAM-type carbon pricing may increase compliance costs.<\/li>\n
      7. Fragmentation:<\/strong> Lack of coordination among PLI, DLI, and state incentives risks duplication and inefficiency.<\/li>\n<\/ol>\n

        Policy Imperatives<\/strong><\/h2>\n
          \n
        1. Strengthen Manufacturing Ecosystem<\/strong>: Integrate ISM with National Electronics Policy<\/strong> for a seamless value chain from design \u2192 fab \u2192 ATMP \u2192 end-product<\/strong>. Provide tax holidays, cheaper land\/power, and infrastructure corridors (Gujarat, Karnataka, Tamil Nadu).<\/li>\n
        2. Talent & Skill Development<\/strong>: Expand semiconductor curriculum across IITs, NITs, IIITs<\/strong>, and polytechnics. Public\u2013private skilling partnerships like Lam Research\u2019s 60,000 engineer training program<\/strong>.<\/li>\n
        3. International Partnerships & Tech Transfer<\/strong>: Leverage India\u2013US iCET<\/strong>, Japan\u2013India Semiconductor MoU (2023), and Quad supply chain resilience initiatives. Negotiate IP-sharing and R&D collaborations instead of just FDI.<\/li>\n
        4. R&D and Start-up Ecosystem<\/strong>: Scale up Design Linked Incentive (DLI)<\/strong>, promote fabless chip design start-ups. Invest in indigenous processors like SHAKTI (IIT-M) and VEGA (CDAC)<\/strong>.<\/li>\n
        5. Raw Material and Energy Security<\/strong>: Diversify sources of rare earths through ties with Australia and Africa<\/strong>. Invest in renewable-powered fabs for sustainability.<\/li>\n
        6. Governance & Coordination<\/strong>: Establish an Integrated Semiconductor Task Force<\/strong> for inter-ministerial and state coordination. Encourage PPP models<\/strong> with Indian conglomerates (Tata, Vedanta, Reliance) leading investments.<\/li>\n<\/ol>\n

          Conclusion<\/strong><\/h2>\n

          As Amartya Sen notes in Development as Freedom<\/strong>, technology underpins sovereignty. A coherent semiconductor ecosystem can secure India\u2019s digital future, balancing self-reliance, global integration, and sustainable economic growth.<\/p>\n","protected":false},"excerpt":{"rendered":"

          Introduction Global semiconductor revenues crossed $600 billion in 2022 (SEMI Report), underscoring their role as the \u201coil of the digital age.\u201d India\u2019s ambition to build a full value chain is central to Atmanirbhar Bharat. Semiconductors: A Strategic Sector Backbone of AI, 5G, EVs, defence, space, healthcare, and Industry 4.0. India consumes $30+ billion worth of… Continue reading [Answered] India aims to become a competitive semiconductor hub by building a full value chain. Examine the challenges and policy imperatives in achieving technological self-reliance and economic growth in this strategic sector.<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-345708","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/345708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=345708"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/345708\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=345708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}