Samparna Tripathy, Anup Rajput, Amol Sarin, and Pranay Kotasthane
Executive Summary
Technological, geoeconomic, and geopolitical imperatives underlie recent attempts by nation-states to revisit their semiconductor industry policies. India too is in the midst of rolling out several incentives to safeguard its economic and strategic interests.
This document takes a step back and zooms in on the strengths, weaknesses, opportunities, and threats of India’s semiconductor ecosystem.
We find that India’s primary strength lies in its vibrant integrated circuit (IC) design ecosystem with a highly experienced talent pool. However, weak research & development (R&D) focus, prohibitive costs of acquiring intellectual property (IP), and limited start-up capital have inhibited the potential of local design houses.
In semiconductor manufacturing, misplaced policies prioritising capital intensive leading-edge nodes have led to several false starts. The real opportunity for India lies in trailing edge node fabs and speciality fabs.
Finally, in the absence of backward linkages with fabrication plants or forward linkages with Original Device Manufacturers (ODMs) or Original Equipment Manufacturers (OEMs), doing business in the Assembly, Testing, Marking & Packaging (ATMP) segment in India becomes prohibitively expensive.
We recommend that India should strive to create a world-class fabless ecosystem by facilitating domestic design IP creation. The ATMP market is gradually becoming R&D intensive and the demand for product conceptualisation skills is increasing. India will have to align its skilling policies in alignment with the industry. Further, we suggest that India “looks outward” and leverages consortiums like the Quad to pool in resources, jointly invest, and conduct trade to obtain critical access to materials, technological know-how, and markets for semiconductors.
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