A India’s semiconductor boom hinges on ecosystem growth

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India’s semiconductor ambitions are gaining momentum, but their long-term success depends on building a robust ecosystem. The country has made significant strides with initiatives like the India Semiconductor Mission (ISM) and investments from global players such as Micron, Tata, and Foxconn. However, to sustain this momentum, India must focus on several critical areas:

1. Infrastructure & Manufacturing Capacity

• Setting up fabs (fabrication plants) requires massive investment and reliable infrastructure, including uninterrupted power and water supply.
• States like Gujarat and Karnataka are emerging as semiconductor hubs, but more regions must develop specialized industrial clusters.

2. Supply Chain & Raw Materials

• India still relies heavily on imports for wafers, chemicals, and chip fabrication equipment.
• Developing local supply chains will reduce dependencies and improve cost efficiency.

3. Skilled Workforce

• The semiconductor industry demands a highly skilled workforce in chip design, fabrication, and testing.
• Strengthening engineering education, R&D partnerships, and vocational training programs will be key to closing the talent gap.

4. Policy & Government Support

• The PLI (Production Linked Incentive) scheme has attracted investments, but streamlined policies and faster approvals are needed.
• Incentives for startups and fabless semiconductor companies will drive innovation.

5. Collaboration & Research

• Encouraging partnerships between universities, global chipmakers, and Indian tech firms will boost R&D.
• AI, IoT, and automotive sectors can serve as key growth areas for India’s semiconductor demand.

Final Thoughts

India’s semiconductor boom is on the right track, but the country must expand its ecosystem to become truly self-reliant. A holistic approach involving infrastructure, supply chains, talent, and policy reforms will be crucial for long-term success.

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It looks like your message got cut off at “compromised resilien…”. Were you about to discuss how India’s focus on IT services may have weakened its resilience in hardware manufacturing, including semiconductors?

If so, it’s an interesting point—India’s IT boom created global giants in software and services, but it also led to a lack of investment in core hardware industries. While China, Taiwan, and South Korea built their chip manufacturing ecosystems, India remained largely dependent on imports.

Let me know how you’d like to continue this thought! Do you want to explore solutions for bridging this gap, or the historical impact of IT dominance on India’s semiconductor industry? 🚀

Also Read: India’s quest for semiconductor self-reliance gets wings in 2024. Here’s what to expect in 2025

India’s quest for semiconductor self-reliance gained significant momentum in 2024, setting the stage for transformative developments in 2025. Here’s an overview of the key initiatives and expectations:

Major Investments and Collaborations

• Tata Group’s Semiconductor Facility: In August 2024, Tata Electronics initiated the establishment of India’s first indigenous semiconductor assembly and test facility in Jagiroad, Assam, with an investment of approximately ₹27,000 crore (around US$3.6 billion). This facility is expected to become operational by mid-2025, producing up to 4.83 crore chips daily using indigenous technology, and generating approximately 27,000 jobs. citeturn0search14
• NXP Semiconductors’ R&D Expansion: In September 2024, NXP Semiconductors announced an investment exceeding $1 billion to bolster its research and development efforts in India, effectively doubling its current endeavors in the country. This move underscores India’s growing importance in the global semiconductor landscape. citeturn0news17
• Lam Research’s Commitment: In February 2025, U.S.-based Lam Research declared plans to invest over $1 billion in Karnataka, India, over the next few years. This investment aims to enhance the semiconductor ecosystem in the region, aligning with India’s strategic goals in the sector. citeturn0news18
• Analog Devices and Tata Group Partnership: Analog Devices (ADI) and Tata Group entered into an agreement to explore semiconductor product manufacturing in India. Tata Electronics is investing $14 billion to build the country’s first semiconductor fabrication facility in Gujarat and a chip-assembly and testing facility in Assam. These initiatives align with India’s ambition to become a major global chipmaker. citeturn0news19
• Tower Semiconductor and Adani Group’s $10 Billion Project: In September 2024, Israel’s Tower Semiconductor and India’s Adani Group announced a $10 billion semiconductor project in Maharashtra. This initiative is part of India’s efforts to position itself as a global chip manufacturer, with the planned plant having an initial capacity of 40,000 wafers. citeturn0news20

Government Initiatives and Policy Support

The Indian government has been proactive in fostering a conducive environment for semiconductor manufacturing:

• Financial Incentives: The government has introduced a $10 billion incentive package to attract global semiconductor manufacturers and support domestic startups, aiming to reduce reliance on traditional chipmaking hubs like China and Taiwan. citeturn0news17
• Infrastructure Development: States like Karnataka and Gujarat are emerging as semiconductor hubs, with dedicated industrial clusters and infrastructure support to facilitate manufacturing and R&D activities. citeturn0news18

Expectations for 2025

Building on these developments, 2025 is poised to be a pivotal year for India’s semiconductor industry:

• Operationalization of Key Facilities: Facilities like Tata’s assembly and test unit in Assam are expected to commence operations, marking a significant milestone in domestic chip production. citeturn0search14
• Enhanced R&D Capabilities: With substantial investments from companies like NXP Semiconductors, India is set to strengthen its research and development capabilities, fostering innovation and technological advancement. citeturn0news17
• Job Creation and Skill Development: The burgeoning semiconductor sector is anticipated to create thousands of jobs, necessitating focused efforts on skill development and training to build a competent workforce. citeturn0search14

In summary, the concerted efforts of the Indian government and industry stakeholders in 2024 have laid a robust foundation for the semiconductor sector. The year 2025 is expected to witness the fruition of these initiatives, propelling India closer to its goal of semiconductor self-reliance.

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industry bodies, could be expanded into long-term engagement programs. Instead of one-off events, structured supplier incubation programs could be introduced to foster relationships between semiconductor startups and global suppliers.

Scaling Supplier Connectivity

1. Supplier Incubation Hubs
   • Establish supplier development hubs where Indian startups can work closely with global semiconductor material and equipment providers.
   • These hubs can function as B2B matchmaking platforms, allowing long-term engagement beyond one-day events.
2. Government-backed Supplier Consortiums
   • The government could facilitate consortiums of suppliers and Indian semiconductor startups, providing easier access to components, tools, and technology licenses.
   • Such consortiums could mirror successful models in Taiwan (TSMC ecosystem) and South Korea (Samsung’s supplier network).
3. Investment in Supply Chain Localization
   • Prioritize domestic production of semiconductor-grade materials, packaging solutions, and fab equipment to reduce import dependency.
   • A “Make in India” semiconductor supplier scheme with tax benefits and incentives could attract international players to set up local units.

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Also Read: The global race for AI chips intensifies. Where does India stand?

The global race for artificial intelligence (AI) chips is intensifying, with major players like Nvidia and Broadcom making significant advancements. Nvidia has faced recent market challenges, while Broadcom reported a 77% increase in AI revenue, reaching $4.1 billion in the last quarter. citeturn0news27turn0news30

India’s Position in the AI Chip Landscape

India is proactively enhancing its semiconductor and AI capabilities through several key initiatives:

• Indigenous Microprocessor Development: The SHAKTI project, led by IIT Madras, has successfully developed microprocessors like RIMO, Risecreek, and Moushik. Notably, in February 2025, IIT Madras and ISRO collaborated to design and boot a 64-bit IRIS chip, tailored for space applications, marking a significant milestone in India’s semiconductor journey. citeturn0search33
• AI Compute Infrastructure: The IndiaAI Mission has established a state-of-the-art shared computing infrastructure, starting with a capacity of about 10,000 GPUs. This facility includes advanced processors from AMD and Nvidia, aiming to provide affordable computing power to developers, researchers, and students, thereby fostering AI innovation. citeturn0search32
• Semiconductor Manufacturing Facilities: The Tata Semiconductor Assembly and Test Pvt. Ltd. (TSAT) is setting up India’s first indigenous semiconductor assembly and test facility in Jagiroad, Assam. With an investment of approximately ₹27,000 crore (around US$3.6 billion), this facility is expected to become operational by mid-2025, significantly boosting India’s semiconductor manufacturing capabilities. citeturn0search34

Challenges and Future Outlook

Despite these advancements, India faces challenges such as the need for a robust semiconductor ecosystem, skilled workforce development, and increased research and development efforts. However, with continued investments and strategic collaborations, India is positioning itself to be a significant player in the global AI chip industry in the coming years.

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