India is paving the way to becoming a major player in the global semiconductor industry, especially in the automotive sector. This is driven by a combination of government initiatives, industry investments, and a growing demand for semiconductors in automotive applications. As the world transitions towards electric vehicles and ADAS, the need for robust and reliable semiconductor supply chains has never been greater. Here’s how India is positioning itself to seize this opportunity.
Government Initiatives and Policies
The Union Government of India has reiterated its focus on developing India into a semiconductor nation. With policies such as the Production Linked Incentive (PLI) scheme, financial incentives are being offered to companies that establish semiconductor units in India. After making a non-planned allocation of Rs 3,000 crore in the Union Budget 2023 24, the government has once again allocated Rs 6,903 crores in Budget 2024-25, aimed at accelerating the development of semiconductor and display manufacturing ecosystems. The objective of the ‘Make in India’ initiative is to position India as a global manufacturing hub by attracting investments from both domestic and international companies. These measures are designed to attract leading global semiconductor firms and stimulate local startups, creating a vibrant and self-sufficient semiconductor industry.
Recent Developments and Strategic Investments
The Government of India has approved significant proposals to enhance the country’s semiconductor manufacturing capabilities. Tata Group’s Tata Semiconductor Assembly and Test (TSAT) will establish a state-of-the-art assembly, testing, marking, and packaging (ATMP) unit in Morigaon, Assam. The upcoming facility, with an investment of INR 27,000 crore, is anticipated to generate thousands of direct and indirect employment opportunities in the area.. Moreover, the collaboration between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) will set up India’s first AI-enabled state-of-the-art semiconductor fabrication facility in Dholera, Gujarat
Simultaneously, CG Power and Industrial Solutions Ltd. announced a ₹7,600 crore investment over five years in a joint venture with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics. The collaboration aims to establish an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat, with a planned capacity of 15 million units per day. Samsung Semiconductor India Research (SSIR) has inaugurated a semiconductor R&D facility in Bengaluru. Additionally, two Karnataka-based semiconductor firms, Saankhya Labs and Sensesemi Technologies, have been approved under the Design Linked Incentive (DLI) Scheme. Saankhya Labs specializes in wireless communication and semiconductor solutions for broadband, satellite, and broadcast applications, while Sensesemi focuses on developing Systems on Chip (SoC) for Internet of Medical Things (IoMT) and IoT devices. These strategic investments not only aim to strengthen India’s position in the global semiconductor supply chain but also highlight the government’s commitment to fostering a robust semiconductor ecosystem, driving innovation, and supporting advanced technology development within the country.
Growing Demand for Automotive Semiconductors
The automotive industry is undergoing a significant transformation with the shift towards electric mobility and smart, connected vehicles. Semiconductors play a pivotal role in this transformation, powering everything from battery management systems in EVs to sensors and processors in ADAS. As a result, the demand for automotive semiconductors is expected to grow exponentially in the coming years. India’s automotive market, one of the largest in the world, presents a substantial opportunity for semiconductor manufacturers. With a burgeoning middle class and increasing urbanization, the demand for vehicles equipped with advanced technologies is set to rise. This creates a fertile ground for the growth of the semiconductor industry, catering to both domestic needs and global markets.
Building a Skilled Workforce
To support the growth of the semiconductor industry, India is focusing on building a skilled workforce. Educational institutions and industry bodies are collaborating to develop specialized training programs and research initiatives. Institutes like the Indian Institute of Technology (IIT) and the Indian Institute of Science (IISc) are playing a crucial role in advancing semiconductor research and development. Moreover, the government’s emphasis on STEM (Science, Technology, Engineering, and Mathematics) education aims to produce a pool of talented engineers and technicians who can drive innovation in semiconductor manufacturing and design. This focus on education and skill development is essential for sustaining the growth of the semiconductor industry in India.
Challenges and the Way Forward
While the prospects are promising, India faces several challenges in establishing a foothold in the semiconductor market. These include the need for significant capital investment, the complexity of semiconductor manufacturing processes, and competition from established global players. Additionally, ensuring a stable supply of raw materials and overcoming infrastructure bottlenecks are critical hurdles that need to be addressed. However, with strategic government support, industry collaboration, and a focus on innovation and skill development, India is well on its way to becoming a major player in the semiconductor market. By leveraging its strengths and addressing these challenges, India can establish a robust semiconductor ecosystem that not only caters to the automotive industry but also contributes to the broader technological advancement of the nation. In conclusion, India’s ambition to establish a foothold in the semiconductor market within the automotive industry is a significant step towards achieving technological self reliance and economic growth. With the right mix of policies, investments, and innovation, India is poised to play a pivotal role in the global semiconductor landscape, driving the future of automotive technology.
Yashi Mittal
Head of Corporate Communications
Future Mobility Media