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HomeHighlightsIndia Poised to Become Semiconductor Powerhouse: GlobalData

India Poised to Become Semiconductor Powerhouse: GlobalData

23 June 2022: India has the potential to become a semiconductor hub in the next decade, according to GlobalData, due to favorable government initiatives. The leading data and analytics company says that India is set to be a strong alternative to China, which is experiencing large supply chain disruption.

According to a GlobalData case study, the impact of both the Russia-Ukraine conflict and COVID-19 on chip production highlighted just how reliant the world is on such a small number of raw material suppliers and manufacturers, which are mainly located in geopolitically high-risk regions. The effects of that overreliance are already evident through the chokepoints faced by the industry.

Kiran Raj, Practice Head at GlobalData, comments “The semiconductor industry relies heavily on both China and Taiwan production. Governments of advanced economies have become alarmed by recent shortages, with many now rolling out plans to stimulate local production in the mid-term. However, such responses have come too late, and they are generally economically inefficient. The world will be looking for alternative semiconductor partners, of which India is a strong candidate. The country is gearing up and making significant moves to become a global semiconductor production hub.”

GlobalData’s Disruptor Intelligence Center highlights various strategic initiatives being taken by the Indian government, as well as regional and global companies to address the chip shortage:

Key Indian Government Initiatives:

  • Government has announced a nearly $10 billion scheme to incentivize chipset assembly, packaging, and manufacturing by 2027 to attract chipmakers to the country. Competing with this are similar investments such as the $49 billion EU Chips Act and the $52 billion US CHIPS Act
  • ‘Chips to Startup’ (C2S) program has been introduced that will ready a talent pool of highly trained engineers to help the country become a semiconductor hub
  • Government is currently seeking applications from 100 local companies, start-ups, and micro, small, and medium enterprises (MSMEs) under the design linked incentive (DLI) scheme to create a vibrant ecosystem for semiconductor chip design in India

Five companies have made proposals worth more than $20 billion to set up semiconductor and display fabrication units in India. The companies involved are a joint venture between Vedanta Group (Vedanta) and Foxconn, Singapore-based IGSS Ventures, India Semiconductor Manufacturing Corporation (ISMC), Vedanta, and Elest
Tata group has been in talks with multiple Indian states to buy land to build a chip facility and test unit, which is estimated to be worth $300 million

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