By Dilip Sawhney
The global semiconductor landscape is transforming, accelerated by the supply chain disruptions that followed the COVID-19 pandemic and escalating global geopolitical concerns. Industries such as automotive, consumer electronics, and the high-tech sector bore the brunt of post-pandemic chip shortages – particularly in countries like India where domestic semiconductor manufacturing has historically been limited. To date, India’s USD 24 billion demand for semiconductors is almost entirely reliant on imports.
The opportunity for India is enormous. By developing a cutting-edge fabrication and chip manufacturing ecosystem, the country can reduce its reliance on imports and position itself as a crucial player in the global semiconductor supply chain. This high-value export not only boosts GDP but also enhances India’s integration into global value chains (GVCs), driving economic growth and innovation. A strong semiconductor industry will attract related businesses and research institutions, fostering a dynamic innovation ecosystem that benefits the broader economy.
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As per the estimate by the Ministry for Information Technology, the Indian semiconductor sector to surpass $100 billion in valuation by 2030. Aligned to this vision, the Union Cabinet approved a US$394.15 million investment to establish a semiconductor manufacturing unit in Gujarat. This was the fifth such facility announced under the India Semiconductor Mission (ISM), bringing total investments in the sector to ₹1,52,307 crore (US$18.15 billion). These recent investments highlight India’s drive to become a global semiconductor hub, boosting innovation, research, and employment.
The government’s policies show the urgency to push domestic production. Initiatives such as the production-linked incentive (PLI) and design-linked incentive (DLI) schemes, alongside tax breaks and eased regulations, are major boosts to manufacturers. The government has also launched a scheme to establish semiconductor ‘fabs’, aiming to strengthen the country’s electronics manufacturing ecosystem and build a reliable semiconductor value chain. The initiative offers fiscal support of up to 50% of project costs for approved applicants for up to six years, sharing the risk between the government and investors. Targeting companies, consortia, and joint ventures, the scheme focuses on Silicon CMOS-based fabs for producing semiconductor components.
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