India has revealed big plans to ramp up semiconductor manufacturing and aims to achieve self-reliance in the technology sector within 5 years.
India is gearing up for a major boost in semiconductor manufacturing and getting ready to make some big moves in the tech world!
Over the next five years, India wants to become a major player in semiconductor manufacturing sectors. These are tiny parts that go into lots of gadgets like cars, computers, phones, and washing machines. Right now, countries like Taiwan, South Korea, and China are the big bosses in making these things, but India wants to change that.
The Indian government is offering a huge incentive of US$10 billion to attract companies to set up factories for semiconductor manufacturing. The goal is to have more of these factories in India and less in other countries. This would create jobs and help the economy grow.
The Minister of IT and Telecom, Ashwini Vaishnav, says India has the talent and skills to do this. He believes that within five years, India can become a top player in semiconductor manufacturing sector. This would make India less dependent on other countries for these important parts.
“It’s crucial for a developing country of our size to possess a semiconductor supply chain domestically. Our robust decision-making abilities, stemming from our design capabilities, necessitate manufacturing capabilities as well, as that’s where further value addition occurs,” explained Vaishnav. The semiconductor plans are poised to make India self-reliant, triggering a ripple effect across the economy and various industries, generating jobs and livelihoods, as per the minister’s assessment.
The government has already offered incentives worth Rs 76,000 crore to attract big companies like Micron and Tata Group. Many other countries are also interested in India now, especially since there have been some problems with getting semiconductors from China recently.
North-eastern region expected to become a technology hub
Assam has made a big move by getting a major investment for a semiconductor manufacturing plant. This puts it in the league of big industrial states like Gujarat and Maharashtra. In a significant announcement on Friday, 1st of March Prime Minister Narendra Modi declared that India would become a global hub for semiconductor manufacturing. Prime Minister Modi is continuously working on the goal of “Vikshit Bharat”.
This decision came after the government approved the establishment of three semiconductor manufacturing units on February 29. These units will be located in Dholera and Sanand in Gujarat, and importantly, in Assam’s Morigaon. Construction for all three units is set to start in the next 100 days.
The plan for a semiconductor unit in Assam is quite unique. Assam and the northeast region haven’t been known for technology or manufacturing. Many talented people from this area usually seek opportunities outside the state. However, with the first semiconductor manufacturing unit backed by a massive private investment of Rs 27,000 crore, the northeast has a chance to overcome these challenges and show what it’s capable of. Assam Chief Minister Himanta Biswa Sarma played a key role in securing this investment.
Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up this unit, making it the largest private investment in Assam. With this move, the state will meet the world’s demand for advanced semiconductors, including those needed by companies like Elon Musk’s Tesla. This plant will not only boost self-reliance in a crucial sector but also enhance Assam’s reputation as a hub for technological manufacturing with great potential in electronics.
The northeast region, often seen as unstable and far from New Delhi, has been overlooked in terms of strategic industries. However, with the support of leaders like Sarma and the backing of the central government, there’s a push to change this perception and bring more development to the region.
Burden of the past: Some decisions from the past that can dash India’s hopes in semiconductor manufacturing
For 30-40 years, India missed the opportunity, leading to the impression that it couldn’t succeed. India has the potential, but it’s struggling to shake off the image of past failures and earn a reputation for success. India not only lost out to developed nations but also to developing ones. For example, Intel chose Malaysia to build its largest 3D chip packaging facility. This wasn’t always the case. Back in the 1960s and ’70s, Intel was interested in setting up a manufacturing unit in India. However, the government didn’t allow it to build a facility that could produce more than hundreds of thousands of chips. Attempts were made again in 2005 with a packaging unit, but they were unsuccessful.
This missed opportunity makes us wonder how things could have been different if Intel had set up a facility in India. Experts and officials from MeitY believe that once the ecosystem is established — which the government hopes will happen with Micron’s ATMP plant — things will improve. However, ATMP only involves testing and packaging, which is the last step in the process. The design, development, and fabrication stages come before that, and building them is easier said than done. Now, big chip companies, except for Tower, aren’t considering India.
The government tried to start fresh in December 2021, but it had to deal with the past problems. But it’s not going to be easy. Setting up these factories is expensive and takes a long time. India also needs more skilled workers who know how to make semiconductors. The government is working on this by starting new courses in colleges.
Getting the right technology is another challenge. India needs to partner with companies that have the know-how to make semiconductors. But not many of these companies are interested in working with India right now.
The scarcity of skilled workers is a major challenge for chip companies worldwide. India, despite its robust engineering foundation, falls short in this area. Semiconductor firms have voiced worries about the scarcity of manufacturing and packaging talent in India, which could impede investments. This situation risks the underutilization of India’s semiconductor investments.
To tackle this issue, the All India Council for Technical Education (AICTE) has launched BTech courses in Electronics VLSI Design & Technology and a Diploma in IC Manufacturing. These programs are being offered in numerous colleges, including esteemed institutions like the Indian Institutes of Technology. The Ministry of Electronics and Information Technology (MeitY) aims to train more than 85,000 skilled workers by 2027.
Despite these challenges, India is hopeful. It’s trying to attract big companies and investing in infrastructure to make it easier for them to set up factories. The government is also hoping that Indian companies like Reliance Industries will join the effort.
Stable eco-systems
Countries like the US, Europe, and Japan have another advantage: they have many fabless and electronics product companies that buy chips. This makes it easier for chip makers to grow and build new factories.
In the current situation, Satya Gupta says there are two types of companies that can help India’s semiconductor manufacturing Mission. First, there are established companies like Micron and Intel. Second, and more importantly, there are large Indian conglomerates.
Recently, there have been hints that Reliance Industries may invest in this area. Companies like Reliance or Tata Group have the experience, global reach, and financial power to execute big projects. They focus on digital technologies and customers, which could be a powerful combination.
One reason for hope in India is the growth of the electronics manufacturing industry over the past decade. By playing to its strengths and taking advantage of the desire to move supply chains away from China, India has attracted big names like Apple, Samsung, HP, Dell, and Lenovo to set up assembly lines in the country.
India has already become a big name in making electronics like phones and computers. Now, it wants to do the same in making the tiny parts that go into these gadgets. With the right support and hard work, India hopes to become a global leader in semiconductor manufacturing.
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