The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe.
Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains.
Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and even tooling and logistics for semiconductors and electronics, reflecting a comprehensive strategy to bolster domestic manufacturing and innovation.
The US$10 billion “India Semiconductor Mission” provides up to 50 percent of the project costs as fiscal support for semiconductor, display fabs and ATMP/OSAT projects. Additionally, state governments like Gujarat contribute an extra 20 percent toward project costs. Leveraging these incentives, Micron Technology in June last year announced a new US$2.75 billion assembly and testing facility (ATMP).
In February, the Indian government greenlit another three semiconductor projects, including a semiconductor fab to be developed by Tata Electronics Private Ltd and Powerchip Semiconductor Manufacturing Corp of Taiwan, starting with a capacity of 50,000 wafer starts per month and costs more than US$10 billion. For these projects, construction and operationalization are being facilitated and accelerated through a “whole of government” approach.
Understanding the demand dynamics of India’s electronics manufacturing transformation is equally crucial. India’s manufacturing industry is projected to become a US$1 trillion market by next year and US$7.5 trillion by 2047, data compiled by Ernst and Young showed.
The expansion of India’s manufacturing market is propelled by key macro trends, including the telecommunications sector, where India stands as one of the largest markets for mobile phones and Internet usage, including 5G data. Additionally, the automobile sector, particularly electric vehicles, the Internet of Things, defense and the aerospace industry are significant contributors to this growth trajectory.
India’s “Digital Revolution,” fueled by digital public goods like Unified Payments Interface, Aadhar and “India Stack,” have revolutionized and democratized payments, identity verification and many aspects of governance. This software stack creates a need for a corresponding hardware stack, driving demand for enhanced manufacturing capabilities.
Experts identify “talent scarcity” as a key challenge for global chipmakers, yet India’s demographic dividend, marked by its young and technically proficient population, positions it uniquely to overcome this hurdle.
India boasts a highly skilled talent pool with 20 percent of the world’s semiconductor design engineers designing more than 2,000 chips annually. Key industry giants like Intel, Samsung, Micron, AMD, Qualcomm and Mediatek already have significant operations in the country.
Equally impressive is India’s burgeoning ecosystem of start-ups and research labs, particularly under the “Digital India RISC-V” program, which fosters an Open-Source ecosystem that spurs innovation and competition while reducing cost barriers. This has propelled start-ups such as “InCore Semiconductors” to develop advanced RISC-V processors building on the success of the famed indigenously designed SHAKTI microprocessor. Similarly, another start-up “Saankhya Labs” stands out for its pioneering work in developing indigenous 5G chipsets and software-defined radio solutions.
Furthermore, the Indian government has earmarked semiconductor and electronics talent development as a top priority. Under the “India Semiconductor Mission,” the government has partnered with 104 universities and institutions nationwide to revamp their semiconductor curricula and create specialized courses. This effort extends to partnerships with top global institutions like Purdue University for joint research centers and dual-degree programs. Also noteworthy is the fact that more than 15 Taiwanese universities have teamed up with Indian universities for academic collaboration and partnerships.
The respect for Taiwanese enterprises in India is well illustrated by the awarding of the Padma Bhushan, one of India’s most prestigious civilian honors, to Foxconn chairman Young Liu (劉揚偉). Taiwanese firms have been at the forefront of benefitting from Indian government programs like the “Production Linked Incentive Scheme.”
It is often said that IT has become a symbol of the India-Taiwan relationship, underscoring their economic complementarities. Both economies boast of substantial synergies ripe for development, particularly timely in the current geoeconomic landscape. For instance, the innovation and talent of Indian design houses can be realized through the excellent fabrication and manufacturing capabilities of Taiwan, thereby bringing benefits to both these innovative societies.
Thus, in this Techade, India and Taiwan must use their shared values of democracy and pluralism, and leverage synergies to fully harness the new age technologies for a safe, secure and prosperous future.
Manharsinh Yadav is director-general of the India Taipei Association.
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