In conversation with SEMI CEO: charting India's course to semiconductor independence

Prasanth Aby Thomas, DIGITIMES, Bangalore 0

Ajit Manocha, president and CEO, SEMI. Credit: SEMI

India's foray into the semiconductor sector continues to command attention, although several ambiguities remain for observers that need to be addressed. Following a series of predictions and challenges, the most recent reports indicate that India may be on track to launch its first homegrown semiconductor chips by the close of 2024.

In an exclusive interview with DIGITIMES Asia, Ajit Manocha, President and CEO of SEMI, and an advisory member of the government's Indian Semiconductor Mission, said that while there are proactive efforts, it will be a long, challenging road to build a robust India semiconductor ecosystem.

"With countries worldwide recognizing the exceptional growth opportunity and strategic importance of semiconductors for their respective national economies and security, multiple governments are offering incentives to attract chip manufacturing," Manocha said. "Given that, the government of India has stepped up to do the same. Time is of the essence to capture the largest possible share of growth, so the government should work with industry advisors to learn from the mistakes of others and take a first-time-right approach to implement policies and investments."

Capitalizing on the strengths

Any country without a robust semiconductor ecosystem can face a mismatch between chip supply and demand, as we experienced during the pandemic. India has an advantage because its semiconductor market is on an exponential growth path, partly due to the manufacturing of numerous electronic devices, especially smartphones, and the rapidly growing and evolving automotive industry.

"India's large population of 1.4 billion is a huge market for domestic consumption, so semiconductor companies will prioritize the Indian market for growth," Manocha said. "Strengthening India's domestic semiconductor manufacturing and ties with key suppliers worldwide will help to ensure its supply of chips."

Yet, the semiconductor manufacturing and design supply chain remains global and interconnected to a great extent, as the incredible complexity requires specialization, materials, and talent that no single country can provide. So, while there is great value and excitement about establishing India's own vibrant and extensive semiconductor ecosystem, it will need to partner with global players to realize its domestic potential fully.

"As a starting point for India, it will make sense to start manufacturing chips at mature nodes for applications such as automotive, where the global market is looking to add capacity," said Manocha. "To rise from these beginnings to more advanced-node capabilities, India will need to forge strategic partnerships with established global players."

Collaborations critical

Collaboration is crucial in the global semiconductor industry. The world faces unprecedented challenges on geopolitical tensions, talent supply chain disruptions, and the push for sustainability that no individual company or country can address on its own.

"This opens up many opportunities for India and her companies to partner with SEMI and our members to address these challenges and the industry's path to growth," Manocha said. "Additionally, two key growth markets for the semiconductor industry – automotive and medical technology – align well with India and present an opportunity to carve out niche strengths."

A good example for India is the broader Southeast Asia region, which has developed a robust position in Outsourced Semiconductor Assembly and Test (OSAT) that serves as a great foundation to expand the region's ecosystem and capabilities in chipmaking. India and Southeast Asia have a growing labor force with a relatively young population that stands as a huge advantage as the semiconductor industry looks to address its talent gap, which may impact long-term growth.

Looking ahead

While the supply chain is being redesigned and geopolitical tensions are on the rise, the industry is facing a huge talent gap as it seeks to expand manufacturing to support expected growth over this decade. This has opened up unprecedented opportunities for new locations for semiconductor fabs.

"India already has a semiconductor industry footprint for software and design, as well as a strong educational foundation for engineering talent, making it an attractive location," Manocha said.

India also offers proximity to other semiconductor hubs in Asia for front-end manufacturing and back-end testing and packaging.

"Based on this unique opportunity, I feel there is a very strong possibility for India to attract chip manufacturing," Manocha continued. "Upstream, I see no reason why India cannot have its own globally recognized electronics makers. Downstream, India has already seen much success in assembling mobile phones, but it can scale up further and also become a global hub for the manufacture of other electronic devices."


Despite the excitement surrounding these efforts, the road ahead is fraught with complex challenges. Manocha emphasized that he has long advocated for the government to concentrate on developing the essential semiconductor ecosystem before delving into fabrication units. Furthermore, he stressed the need to construct the extensive infrastructure— encompassing water, energy, and transportation—necessary to support these fabrication facilities.

"The ecosystem and infrastructure are still the primary challenges India faces, but the government is on the right path to putting the pieces in place," Manocha said. "They are taking a well-organized, methodical approach to listen to industry concerns and taking action that bodes well for the success of the Indian Semiconductor Mission."

In short, despite hurdles, India shows potential thanks to proactive efforts, a robust domestic market, and a globally networked supply chain. The country is well-positioned, leveraging its software and design skills, engineering expertise, and unique geographical proximity to other Asian semiconductor centers.

Success, however, is dependent on its ability to develop a full semiconductor ecosystem, meet infrastructural requirements, foster global collaborations, and address industry difficulties effectively.