India's Evolution in Chip Making and Semiconductor Industries: Government Initiatives and Market Growth

The Indian semiconductor market, which currently stands at an estimated 15 billion USD, is expected to reach a substantial 63 billion USD by 2026, serving as a testament to its growing importance in the global manufacturing landscape. Semiconductors, critical components in electronic devices, are increasingly becoming essential for the modern economy. This rapid growth is driven by strategic government policies and initiatives aimed at establishing a robust semiconductor industry in the country.

Government Initiatives and Tax Incentives

Recognizing the critical role of semiconductors in the global electronics industry, the Indian government has rolled out various tax waivers and other beneficial schemes to attract major chip manufacturing companies from across the globe. The Union Cabinet has approved the Semicon India Programme, a program with an outlay of INR 76,000 crore, aimed at promoting and supporting semiconductor and display manufacturing operations in the country. These incentives include waiving certain taxes, providing subsidies, and facilitating easier entry for international players to set up operations in India.

Key Players in the Semiconductor Industry

Vedanta, a leading conglomerate, in collaboration with Foxconn and ISMC, has submitted applications for semiconductor fabrication facilities (fabs) totaling 13.6 billion USD to the government's Semicon India Programme. ISMC, a key player in this endeavor, has announced plans to establish India's first semiconductor fabrication unit, a significant milestone for the country's semiconductor industry.

Prime Minister's Vision and Goals

Prime Minister Narendra Modi is actively encouraging companies to invest in semiconductor and display manufacturing in India. His vision is to transform the country's semiconductor market from the current 15 billion USD in 2020 to a staggering 63 billion USD by 2026. This vision underscores India's ambition to become a crucial player in the global semiconductor supply chain.

Previous Attempts and Current Success

In the past decade and a half, India has made several attempts to attract semiconductor manufacturers, only for them to fall short. The current response from companies indicates a growing confidence in the Indian government's ability to provide the necessary infrastructure and incentives to build a robust semiconductor ecosystem. This time, the government is being seen as more welcoming of chipmakers than in previous attempts.

Current Semiconductor Facilities in India

Despite the ambitious goals set by the government and the initiatives under way, India's semiconductor industry still faces challenges. Currently, Semiconductor Laboratory (SCL) Chandigarh is the only fabrication chip-making facility in the country. SCL is an autonomous body under the Department of Space, Government of India, and mainly serves the needs of the Defence department and ISRO.

However, various research and development (RD) labs, including those of IISC, TIFR, and most older IITs, have their own fabrication facilities or centers. While these labs play a crucial role in RD activities, they do not match the scale and scope of commercial giants like TSMC and Intel.

In conclusion, India's journey towards becoming a significant player in the global semiconductor industry is gaining momentum. The current government initiatives, ambitious visions, and substantial investments are paving the way for a robust and sustainable semiconductor ecosystem in the country. As the industry continues to grow, it is expected to bring significant economic benefits and technological advancements to India.