India has been taking slow and conditional steps towards indigenous chip design for the last few years and considers local chip development as a strategic requirement.
Numerous attempts were made in the past to develop a semiconductor manufacturing ecosystem, including discussions with leading chip manufacturers TSMC and AMD around setting up a fab plant in the nation. As many countries have already recognized how local chip development helps preserve their strategic interests. For instance, China is building a homegrown chip business, eyeing adoption of domestic semiconductors in 70 percent of its products by 2025, up from 16 percent at present.
India, for its part, is attempting to create a homegrown fabless semiconductor design environment and is securing local talent and supporting nurture academic institutions as well as startups. The purpose is to move to a parallel path as opposed to depending solely upon global technology corporations such as AMD, Intel, and ARM for microprocessors, and Samsung, Qualcomm, and MediaTek for mobile technology.
Business and academia efforts
Over the last 20 years, several global semiconductor companies including the Qualcomm, ARM, Intel, Cadence, and Texas Instruments, have established design and software development infrastructure in the country, helping to build a critical mass of talent that encourages chip development. Additionally,, the administration wants to utilize that talent to support entrepreneurs working on chip design in a fabless semiconductor environment.
Various local businesses and academia-industry incubators have are doing their part across the country, designing and experimenting chipsets, microprocessors, and associated technology that could be used for commercial purposes. The research and development exercise, driven both by homegrown technology entrepreneurs, and government-funded academic institutions, is focused on advancing domestic manufacturing.
Assistance has also come in the construction of a new policy unveiled in February, which strives to make the country a center for electronics manufacturing and gives appropriate incentives for exports and high-tech projects, including semiconductor equipment.
According to recent research by MarketsAndMarkets, the Indian semiconductor market is forecast to be worth USD 32.35 Bn by 2025, growing at a CAGR of 10.1 percent approximately within 2018 and 2025. Of note, is that India has a continually developing electronics system design manufacturing (ESDM) industry with a design base with over 120 units. As per statistics furnished 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 towards the same along with working on different aspects of chip design and verification.
The ESDM industry should benefit immensely from the government-led ‘Make in India’ initiative and is projected to see investment proposals worth Rs 10,000 crore (USD 1.5 Bn) over the next couple of years. For its part, the government is currently altering numerous policies that reflect the shift in its focus on enhancing the ESDM ecosystem in India. Some of the initiatives outlined in the National Electronics policy and the National Telecom policy are by now in the process of completion, such as Electronics Manufacturing Clusters (EMC), Preferential Market Access (PMA) and Modified Special Incentive Package Scheme (M-SIPS).
Enhancing 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 state that, with the implementation of fabrication abilities in India, the country has the potential to attain a higher degree of self-sufficiency in electronics. According to another survey, at the present rate of growth of the ESDM market the predictions show that the industry will grow from USD 76 Bn in 2013 to USD 400 Bn by 2020, alongside the fact that the consumption of semiconductors will continue to increase and there will be a need to fulfill this gap in the electronics arena.
The Indian government has permitted 100 percent Foreign Direct Investment (FDI) under the automatic route in the ESDM sector. The FDI in electronic manufacturing touched an all-time high of Rs 1,23,000 crore (USD 18.34 Bn) in 2016 from around Rs 11,000 crore (USD 1.64 Bn) in 2014. Numerous more significant organizations are also beginning to realize the potential in this sector and are investing heavily in manufacturing from India. For example, Panasonic Corporation is incorporating a new plant in Haryana, which will produce refrigerators and build research and development (R&D) center for appliances for the Indian market.
Finally, it is important to mention that India has recently signed an MoU with Singapore Semiconductor Industry Association (SSIA) to create and develop trade and technical collaboration between the electronics and semiconductor industries of both the nations.