20-25% market share by 2047: India’s ambitious plans for the semiconductor industry

India may be a late entrant into the global semiconductor race, but its ambitions are as broad as can be achieved. Armed with a strategic mix of policy reforms, innovation and a thriving talent pool, the country is poised to position itself as a major player in the global semiconductor ecosystem. These sentiments dominated discussions at the 38th International VLSI Design Conference, held recently in Bengaluru.

Speaking to Business Today on the sidelines of the event, Professor Satya Gupta, President, VLSI Association of India, acknowledged that India’s direct contribution to the global semiconductor market may be modest. However, he emphasized the long-term vision, which aligns with the India@2047 mission. “We are targeting a 20-25 percent share in the global semiconductor value chain,” Gupta said, underscoring the country’s ambitious goals.

The transformation of India’s semiconductor landscape began in earnest in early 2022, when the government launched a comprehensive semiconductor policy. Backed by strong political will, this policy not only placed semiconductors at the heart of India’s economic agenda, but also ensured clarity and support across the ecosystem – from manufacturing to talent development.

Currently, five major manufacturing projects have been given the green light, including collaborations involving Tata Group, Kaynes Semicon Pvt Ltd, CG Power, Micron and TSMC. These projects bring together a mix of local and global players to lay the foundation for a robust semiconductor manufacturing ecosystem.

Hitesh Garg, vice president and country manager, India, NXP Semiconductors, noted that while the manufacturing ecosystem is taking shape, getting up and running chip manufacturing plants (fabs) remains a major hurdle. “Manufacturing plants are capital intensive, and India is still in the early stages of developing its first large plants. While several ATMP (assembly, testing, labeling and packaging) facilities are underway, scaling them up to global standards is still a work in progress,” he explained.

Garg also highlighted the need for a broader focus beyond manufacturing. “India should focus on developing use cases and integrating semiconductor innovations into electronic systems for global markets,” he added, noting the importance of finding end-to-end solutions.

India’s semiconductor ambitions come at a time when the global chip industry is grappling with technical complexities, high capital requirements, and intense competition. These challenges are not unique to India, noted Chris Miller, professor of international history at Fletcher School at Tufts University and author of The Chip War. “The sector is characterized by extraordinary technical complexity, high capital intensity, and relentless competition,” he said, adding that building a comprehensive ecosystem requires sustained investment and effort over decades.

Compared to Taiwan, Miller noted that it took more than 50 years for the island nation to establish itself as a global leader in semiconductors. “India’s strongest foothold is in chip design, which is a critical component of the semiconductor value chain,” he said. Miller also pointed to advances in artificial intelligence, which is expected to accelerate chip design processes and position India as a hub for design innovation.

As India charts its course in the semiconductor sector, the road ahead is full of challenges and opportunities. With the right mix of policies, global partnerships and a focus on design excellence, the country may achieve its ambitious 2047 vision.