The world was panicked when the spread of the Covid virus occurred, right from the industry that relies on the movement of people to a machinery-based sector. The COVID-19 recession had decimated the industry, but the work had to continue without hindrance. The supply chain of the semiconductor sector was affected.
The lack of semiconductors, dubbed the most critical component of any electronic device, caused significant challenges for the electronics manufacturing industry. Automobiles, computers, mobile phones, healthcare equipment, all of it took a hit.
The Indian government announced a Production-Linked Incentives scheme focusing largely on the semiconductor industry. "The PLI will attract Rs 1.7 lakh crore in direct investment over the next six years," said Ashwani Vaishnav, Minister of Electronics and Information Technology, at the launch of the scheme. Around 15-20 MSME units will be formed as a result of this program, causing a boom. It also announced that developing and advancing the sector will cover up to half of the cost of establishing two semiconductor and two display fabrication units and R&D centers, talent development centers, and other facilities. With the government’s initiative, companies involved in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensor fabs, semiconductor packaging, and semiconductor design will benefit from the attractive incentive support. Given variables like low labor costs and large production capacity, the plan to develop domestic semiconductor manufacture has significant strategic advantages. It would not only assist domestic industries in lessening their reliance on semiconductor imports, but it would also create cash from other nations' export markets. Though the benefits of the production-linked incentive (PLI) strategy will take at least 3-5 years to manifest, it will ensure India is better prepared and able to pursue its ambition of becoming the manufacturing hub for the world.
Recent updates by leading Semiconductor companies in India
Micron: Currently, Micron has announced that it is sampling the world’s first vertically-integrated 176-layer NAND solid-state drive (SSD) for the data center. The Micron 7450 SSD with NVMeTM delivers quality-of-service (QoS) latency at or below 2 milliseconds (ms),1 a wide capacity range, and the broadest set of form factors available to meet the needs of the most demanding data center workloads.
Intel: According to a source close to the situation, Israel-based chipmaker Tower Semiconductor, which Intel recently acquired for $5.4 billion, is in active talks with the government about establishing a manufacturing plant in India. "Since the government announced the production-linked incentive (PLI) scheme on December 15, our intention to build a semiconductor facility in India has been resurrected," says a company executive.
India’s contribution towards the growth of the semiconductor Industry
Only a few countries have perfected their manufacture, leaving the others to rely on imports. TSMC (Taiwan Semiconductor Manufacturing Company) in Taiwan and Samsung in South Korea produce up to 70% of the world's semiconductors. India imports 100% of its chips from Taiwan, Singapore, Hong Kong, Thailand, and Vietnam, like other countries around the globe. Following the pandemic, the demand increased, focusing on digitization too. India has backed up its intention to carve out a niche by proposing new regulatory measures for semiconductor investment, including Production Linked Incentive schemes, to become a major player in the $1.5 trillion semiconductor market. Talks with Taiwan are underway to work on capabilities and potentially move into large-scale manufacturing.
According to a Deloitte report, in early 2021, PC sales increased by more than 50% year over year, while cloud computing data center chip purchases increased by 30%. The worldwide semiconductor market is predicted to grow to Rs 75 lakh crore by 2030. In 2020, the Indian semiconductor market was worth Rs 1.13 lakh crore; by 2026, it is expected to be worth Rs 4.73 lakh crore. Wireless communications, consumer electronics, and automotive electronics will boost India's semiconductor business by 2030.
When it comes to R&D and talent supply, India is no stranger to the semiconductor industry. Samsung Semiconductor India R&D is one of the prominent names in the computer device industry that has already benefited from Indian expertise (SSIR). Indian engineers at Samsung Semiconductor India R&D are responsible for some of the most cutting-edge consumer and enterprise products. They've progressed from aiding their Korean design headquarters to designing and developing technologies from the ground up for consumer and commercial products.
Recently in 2021, Lam Research India broke ground on new engineering and R&D facility in Bengaluru. The site will be home to Lam Research India’s development of advanced semiconductor manufacturing equipment hardware and software, as well as its new virtual reality research labs.
The Future of Semiconductor Industry in India
The Semiconductor industry's growth is guaranteed due to the multiple investments and projects that have been in talks post-pandemic. According to a news report, the Tata group has negotiated with various states about purchasing land to establish a $300 million chip assembly and testing center. According to official projections, the Indian semiconductor market was valued at $1.13 trillion in 2020 and is predicted to reach $4.73 trillion by 2026.
India appears to be making a concerted effort to expand its footprint in the semiconductor manufacturing industry. Rajeev Chandrasekhar, the junior minister for skill development and entrepreneurship and electronics and information technology, said that India had tripled its electronics production over the past four years, which is quite a development that has to be overlooked. The government announced a chips-to-startups program to prepare a talent pool of high-skilled engineers for India's transformation into a semiconductor hub.
The Foundational Strength and Employment Opportunities
The plan to enhance semiconductor production will bring in significant investments and create substantial employment opportunities, in addition to reducing the country's reliance on imports. The Ministry of Information Technology, in addition, is seeking ideas from academics, start-ups, and MSMEs to train 85,000 competent engineers in semiconductor design and manufacturing. This would be a massive push in terms of employment in the semiconductor industry across the country. Under the DLI scheme, the government will provide participants with the financial assistance of up to 30% of capital expenditures to construct compound semiconductors, silicon photonics, and sensor production factories in India. Companies that design integrated circuits, chipsets, systems on chips, systems, and IP cores will receive a four- to six-percentage-point incentive on net sales for the next five years. According to MeitY, it is projected to aid the growth of at least 20 such businesses with a turnover of more than Rs 1500 crore in the next five years. The relocation will result in many job openings and boost exports. The government also launched a scheme for chip designers. The government will cover half of the costs under the DLI, or design-linked incentive plan.
An opportunity to lead the charge
This might be your big opportunity if you want to scale new heights in the semiconductor industry. India is going above and beyond to generate opportunities for experts wishing to return to India. Along with the semiconductors, technologies such as AI, ML, Blockchain, Robotics, Biotechnology, Virtual reality, and Augmented reality are paving the way for experienced professionals to grab the reins and lead the charge. If you are looking for the right time to Return to India, it is NOW.
and Explore Opportunities in the Semiconductor Industry in India.