New Delhi, Mar 25 (KNN) India’s semiconductor industry is on a growth trajectory but faces significant challenges, according to a recent report by Jefferies.
While the country boasts a strong engineering talent pool and government support, it must address key hurdles to establish a competitive semiconductor ecosystem.
One of the primary challenges is the underdeveloped supply chain. The availability of key raw materials such as silicon wafers, high-purity gases, specialty chemicals, and ultrapure water remains limited.
Although India has a robust chemical and gas manufacturing sector, particularly in Gujarat’s Dahej region, companies need to enhance their capabilities to produce semiconductor-grade materials.
To address this, the government has prioritised developing the full semiconductor supply chain, reducing reliance on imports.
India’s strength lies in chip design, with nearly 20 per cent of the global semiconductor design workforce based in the country. However, there is a notable skills gap in semiconductor fabrication and testing.
To bridge this gap, companies and the government are collaborating with universities to develop specialized courses tailored to semiconductor manufacturing, assembly, and testing.
Another challenge is stiff global competition. Countries like China, Singapore, Malaysia, South Korea, and Taiwan have decades of experience and well-established semiconductor ecosystems. Many nations are also offering subsidies and incentives to attract semiconductor investments.
In response, India has introduced large incentives to draw investors and has initiated semiconductor manufacturing projects. However, setting up advanced fabrication facilities involves risks such as production challenges, quality control issues, and achieving economies of scale.
Additionally, rapid technological advancements pose a challenge. While India is establishing its first fabrication facility, global players are continuously innovating chip miniaturisation. To stay competitive, India must make substantial capital investments in technology and research.
Despite these challenges, India’s semiconductor industry has the potential to thrive with strong government support, industry collaborations, and investment in R&D.
Establishing a complete semiconductor ecosystem will be crucial for India to become a significant player in the global chip market.
(KNN Bureau)
