India has been taking slow and conditional steps towards local chip design in recent years and considers local chip development a strategic requirement.
Numerous attempts have been made in the past to develop a semiconductor manufacturing ecosystem, including discussions with major chipmakers TSMC and AMD about setting up a fab in the country. Just as many countries have already recognized how the local development of chips helps to preserve their strategic interests. For example, China is building a domestic chip business, anticipating the adoption of domestic semiconductors in 70% of its products by 2025, up from 16% today.
India, for its part, is trying to create a fabless semiconductor design environment and is securing local talent and supporting academic institutions as well as startups. The aim is to move towards a parallel path, rather than relying solely on global technology corporations such as AMD, Intel and ARM for microprocessors, and Samsung, Qualcomm and MediaTek for mobile technology.
Business and academic efforts
Over the past 20 years, several global semiconductor companies, including Qualcomm, ARM, Intel, Cadence and Texas Instruments, have established software design and development infrastructures in the country, helping to build a critical mass of talent that fuels chip development. Additionally, management wants to utilize this talent to support entrepreneurs working on chip design in a fabless semiconductor environment.
Several local companies and academic industry incubators are doing their part across the country by designing and experimenting with chipsets, microprocessors and associated technology that could be used for commercial purposes. The research and development exercise, conducted both by national technological entrepreneurs and government-funded academic institutions, focuses on advancing national production.
Assistance also came in the form of a new policy unveiled in February, which strives to make the country an electronics production hub and gives appropriate incentives for exports and high-tech projects, including semiconductor equipment.
According to a recent survey by MarketsAndMarkets, the Indian semiconductor market is expected to be worth US$32.35 billion by 2025, growing at a CAGR of 10.1% approximately in 2018 and 2025. It is noteworthy that India has a manufacturing continuously developing electronic systems design system (ESDM) with a design base of more than 120 units. According to statistics provided by the Department of Electronics and Information Technology (DeitY), approximately 2,000 chips are designed every year in India, and more than 20,000 engineers contribute to the same, working on different aspects of chip design and verification.
The ESDM industry is expected to benefit immensely from the government-led 'Make in India' initiative and is expected to receive investment proposals worth Rs 10,000 crore ($1.5 billion) over the next two years. For its part, the government is currently changing numerous policies that reflect the shift in its focus on improving the ESDM ecosystem in India. Some of the initiatives outlined in the National Electronics Policy and the National Telecommunication Policy are now in the process of completion, such as Electronics Manufacturing Clusters (EMC), Preferential Market Access (PMA) and Modified Special Incentive Package Scheme (M- SIPS). .
Valuing the sector
In an attempt to work towards this initiative, the government has announced several subsidies and incentives for setting up electronics manufacturing units in India. Experts say that with the implementation of manufacturing capabilities in India, the country has the potential to achieve a greater degree of self-sufficiency in electronics. According to another survey, at the current growth rate of the ESDM market, forecasts show that the industry will grow from $76 billion in 2013 to $400 billion in 2020, coupled with the fact that semiconductor consumption will continue to increase and there will be a need to fill this gap in the electronics area.
The Indian government has allowed 100 percent Foreign Direct Investment (FDI) under the automatic route in the ESDM sector. FDI in electronics manufacturing reached an all-time high of 1,23,000 crore rupees (18.34 billion dollars) in 2016, up from around 11,000 crore rupees (1.64 billion dollars) in 2014. Numerous Top Organizations are also starting to realize the potential in this sector. sector and are investing heavily in Indian production. For example, Panasonic Corporation is incorporating a new factory in Haryana, which will produce refrigerators and build a research and development (R&D) center for home appliances for the Indian market.
Finally, it is important to mention that India recently signed a memorandum of understanding with the Singapore Semiconductor Industry Association (SSIA) to create and develop commercial and technical collaboration between the electronics and semiconductor industries of both nations.