Prime Minister Narendra Modi expressed sorrow a few days ago for India’s tardy entrance into the semiconductor industry, saying that the effort ought to have started thirty years earlier. His perspective, which acknowledges the tardy entry into the semiconductor space, is in line with industry opinions.
Nevertheless, in spite of the postponement, Sanjay Gupta, the head of the India Electronics and Semiconductor Association (IESA), views the announcement of Micron’s Assembly, Testing, Marking, and Packaging (ATMP) initiative as crucial and a “watershed moment.”
With other projects and initiatives in the works, it is hoped that this announcement will be a turning point in the industry’s history, indicating a favorable and upward development trajectory for the Indian sector going forward.
Industry insiders understand the importance of semiconductor-specific policies put in place in states like Gujarat and Odisha, which not only attract investments but also provide governments a chance to develop a competitive advantage. These regulations foster a favorable climate in which governments vie to provide more attractive and unique incentives. State-specific measures may foster the development of skilled labor forces and supportive ecosystems, making them desirable locations for investments.
Furthermore, governments will be able to tailor their regulations to attract certain industrial sectors—like chip design, manufacturing, or testing—by using their unique advantages and resources. States may better match their tactics to certain aspects of the semiconductor sector thanks to this customized approach, which increases their attractiveness to investors.
While Micron’s ATMP factory in Sanand, Gujarat, is coming together, the Odisha government revealed late last year that it has signed agreements with three organizations to create an ecosystem for semiconductor production. The Electronics and Computer Software Export Promotion Council (ESC), Synopsys, and the IESA all signed memorandums of agreement.
As in the cases of Gujarat and Odisha, Uttar Pradesh is currently preparing to launch a semiconductor policy in the state. Officials have been instructed by Chief Minister Yogi Adityanath to evaluate other states’ policies and work with stakeholders and business experts. The objective is to develop a comprehensive semiconductor strategy that will advance UP’s status as a major center.
In the meanwhile, Tata is anticipated to establish an ATMP facility in the Karnataka district of Kolar, with an estimated investment of Rs 200 crore. Foxconn has filed its proposal under the Modified Programme for Development of Semiconductors and Display Manufacturing for the building up of semiconductor fab, which is under evaluation, according to Rajeev Chandrasekhar, MoS for Electronics and IT, during the Winter Session.
Positive talks are also being held on the renovation of the Semi-Conductor Laboratory (SCL) in Mohali. The Ministry of Electronics and IT is leading this initiative as part of India’s efforts to improve its semiconductor manufacturing capacity.
Industry experts think that the nation and industry would greatly benefit from upgrading the infrastructure to match commercial fabs. Additionally, by streamlining the local supply chain, businesses would save money and be able to operate more quickly from design to manufacture. Additionally, having chips available locally will lower import-related costs and make the Indian ecosystem more competitive when compared to other global players.
But in addition to MeitY, the IESA chairwoman claims that the Ministry of External Affairs actively promotes semiconductor cooperation across the world. MEA spearheaded a program similar to the US-India program on Critical and Emerging Technology (iCET), where semiconductors play a major role. In order to increase India’s expertise and growth in this subject, such collaborative activities are essential.
In terms of international alliances, a Memorandum of Cooperation pertaining to the Japan-India semiconductor supply chain collaboration was authorized by the government last year.
However, others question India’s ability to compete with giants such as Taiwan. The chairwoman of IESA emphasizes the need of not heedlessly following other nations’ lead in this regard. India should instead adopt policies that are in line with its present requirements.
Since most of the demand is in this sector, concentrating on established nodes is recommended. Though 2-nanometer or 5-nanometer chip technologies are attractive, it is recognized that there is far less demand for these advanced nodes, raising the issue of why India should pursue them right now.
In a similar vein, talks regarding India’s reluctance to join the wafer fabrication primary market continue. Industry experts pointed out that if setting up wafer fabs was that easy, many countries would have done it by now. They currently think that fabs will catch up when ATMP initiatives begin to take shape.
