India’s Ascent in Semiconductor Manufacturing: Recent Developments and Future Prospects

India’s Ascent in Semiconductor Manufacturing: Recent Developments and Future Prospects

Semiconductors are the backbone of laptop manufacturing, finding application in a multitude of laptop components, including:

  1. Central Processing Unit (CPU): The CPU, serving as the laptop’s brain, is responsible for executing user instructions.
  2. Graphics Processing Unit (GPU): GPUs handle graphics processing and render images on the laptop’s screen.
  3. Memory: Memory is crucial for storing data and instructions required by the CPU.
  4. Storage: Storage is responsible for retaining data and files on a long-term basis.
  5. Input/Output (I/O) Devices: I/O devices, encompassing the keyboard, mouse, and display, facilitate user interaction.
  6. Motherboard: The motherboard acts as the central circuit board, linking and coordinating all laptop components.
  7. Power Supply: The power supply unit furnishes electrical power to all internal components.

In addition to the components mentioned, semiconductors also play a vital role in other laptop parts like the touchpad, webcam, and speakers.

The indispensability of semiconductors in laptop manufacturing is evident; without them, the production of laptops would be infeasible. They underpin the functionality of all contemporary electronic devices.

At present, India relies on imported semiconductors for its laptop manufacturing industry. This dependence renders the Indian laptop manufacturing sector susceptible to supply chain disruptions and price fluctuations.

To mitigate this vulnerability, the Indian government is actively pursuing measures to promote domestic semiconductor manufacturing. These efforts aim to reduce India’s reliance on imported semiconductors, enhancing the cost-effectiveness of laptop production within the country.

The growth of semiconductor manufacturing in India is poised to bring about several positive impacts on the nation’s economy. It will usher in job creation, augment exports, and diminish India’s dependence on foreign semiconductors. Moreover, it promises to render laptops more affordable for Indian consumers.

India’s Comprehensive Approach to Decreasing Semiconductor Imports:

  1. Promoting Domestic Semiconductor Manufacturing: The Indian government is actively endorsing indigenous semiconductor production through initiatives like the Production Linked Incentive (PLI) scheme for semiconductors and the Semiconductor India Programme (SIP). These initiatives extend financial incentives and essential support to companies engaged in semiconductor manufacturing within India.
  2. Investing in Semiconductor Technology Research and Development: India is channeling investments into semiconductor technology research and development via the SIP. This strategic focus aims to cultivate expertise and capabilities essential for domestic semiconductor manufacturing.
  3. Tariff Reduction on Imported Semiconductor Components: The Indian government is steadily reducing tariffs on imported semiconductor components to enhance their competitiveness when compared to domestically manufactured counterparts. This initiative is poised to incentivize companies to expand semiconductor production within India.
  4. Infrastructure Enhancement: Significant investments are being made in infrastructure development, including roads, railways, and ports, to streamline the semiconductor supply chain’s efficiency. These improvements will facilitate cost-effective transportation of semiconductors within India, consequently bolstering domestic manufacturing.
  5. Workforce Skill Development: The Indian government is heavily investing in skill development programs, designed to equip the workforce with the latest semiconductor manufacturing skills. This will position India as an attractive destination for foreign investments in semiconductor manufacturing.

These comprehensive measures are expected to help India curtail its semiconductor imports and stimulate the growth of its domestic semiconductor manufacturing sector. This multifaceted approach stands to generate employment opportunities, drive economic expansion, and reduce India’s reliance on foreign semiconductor imports.

Additionally, India is actively pursuing international collaboration in semiconductor research, development, and manufacturing. Agreements have been signed with countries like the United States and Japan, facilitating cooperation in these areas. India is also exploring potential joint ventures with foreign corporations to establish semiconductor manufacturing facilities within its borders.

While India’s endeavors to decrease semiconductor imports are still in their early stages, they hold the potential to yield substantial long-term benefits for the Indian economy, including job creation, economic growth, and reduced reliance on foreign semiconductor imports.

Several Companies Eager to Venture into Semiconductor Manufacturing in India:

Global Corporations:

  1. Intel
  2. TSMC (Taiwan Semiconductor Manufacturing Company)
  3. GlobalFoundries
  4. Samsung

Indian Enterprises:

  1. Vedanta
  2. ISMC (Indian Semiconductor Manufacturing Company)
  3. SPEL Semiconductor
  4. HCL Technologies

These companies are enticed by the favorable policies and incentives introduced by the Indian government, including the Production Linked Incentive (PLI) Scheme for Semiconductors and the Semiconductor India Programme (SIP). The government is actively fostering an enabling environment for semiconductor manufacturing within India by making substantial investments in infrastructure development and workforce skill enhancement.

For instance, in August 2023, Vedanta and Foxconn announced a collaborative venture aimed at establishing a semiconductor manufacturing facility in Gujarat. Production at this facility is slated to commence in 2025.

Similarly, in July 2023, ISMC disclosed its partnership with Abu Dhabi’s Next Orbit Ventures to establish a semiconductor manufacturing plant in Karnataka. This facility is anticipated to initiate production activities in 2026.

These instances are representative of the growing interest and concrete plans among companies to embark on semiconductor manufacturing ventures within India. The expansion of semiconductor manufacturing in India is poised to bring forth a multitude of positive impacts on the Indian economy. It is expected to drive employment growth, enhance export potential, and reduce India’s reliance on foreign semiconductor imports.

It is imperative to recognize that semiconductor manufacturing is a capital-intensive and intricate industry, demanding substantial financial investments and high levels of technical expertise. Nevertheless, with the concerted efforts of the Indian government and private sector investments, India holds the potential to emerge as a significant player in the global semiconductor manufacturing landscape.

Companies Venturing into Semiconductor Manufacturing in India: Strategic Initiatives to Realize Their Plans

Companies with ambitions to manufacture semiconductors in India are actively taking several key steps to bring their plans to fruition. These include:

  1. Collaboration with the Indian Government: These companies are engaging in productive partnerships with the Indian government to secure necessary approvals and incentives. Additionally, they are working closely with government authorities to develop a comprehensive roadmap for semiconductor manufacturing within India.
  2. Investments in Research and Development: Focusing on research and development, these companies are dedicating resources to cultivate the requisite expertise and capabilities essential for semiconductor production in India. They are also forging partnerships with Indian universities and research institutions to advance semiconductor manufacturing technologies.
  3. Establishing Joint Ventures: To mitigate risk and reduce the cost of setting up semiconductor manufacturing facilities in India, these companies are entering into joint ventures with Indian counterparts. These collaborations allow them to pool resources and expertise effectively.
  4. Workforce Development: In anticipation of ramping up semiconductor manufacturing operations, these companies are actively recruiting and training personnel skilled in semiconductor manufacturing technologies. They are also working alongside the Indian government to create specialized skills training programs for the semiconductor manufacturing workforce.

These concerted efforts are expected to pave the way for these companies to establish semiconductor manufacturing plants in India, with production expected to commence in the coming years.

Here are some specific examples of the proactive measures undertaken by certain companies in their pursuit of semiconductor manufacturing in India:

  • Vedanta and Foxconn: Vedanta and Foxconn have unveiled a collaborative endeavor, forming a joint venture to establish a semiconductor manufacturing facility in Gujarat. This facility is scheduled to commence production in 2025, with an investment of Rs 1.54 lakh crore.
  • ISMC: ISMC has inked a partnership with Abu Dhabi’s Next Orbit Ventures to establish a semiconductor manufacturing facility in Karnataka. Production at this facility is slated to begin in 2026, with an investment of Rs 60,000 crore.
  • SPEL Semiconductor: A leading Indian semiconductor firm, SPEL Semiconductor, renowned for its semiconductor chip design and manufacturing, is gearing up to establish a semiconductor manufacturing facility in Tamil Nadu. Production is expected to commence in 2024.
  • HCL Technologies: A prominent Indian IT company, HCL Technologies, which also boasts involvement in semiconductor design and manufacturing, is planning to set up a semiconductor manufacturing plant in India. Production is anticipated to commence in 2025.

The anticipated growth of semiconductor manufacturing in India is poised to yield manifold positive impacts on the Indian economy. These ventures are expected to drive employment generation, stimulate exports, and reduce India’s reliance on foreign semiconductor imports.

Leave a Reply

Your email address will not be published. Required fields are marked *