The Power of the Chip

The government's push for making India a semiconductor hub has attracted big names such as US-based Micron. But profitability and scaleability could prove to be challenges

- RICHA SHARMA PALAK AGARWAL

PRIME MINISTER NARENDRA Modi, during the 78th Independence Day speech, outlined India’s commitment to becoming a global leader in semiconductor production. This highlights the country’s mission to reduce dependency on imports and enhance technological self-sufficiency.

India accounts for close to 10% of global semiconductor consumption but lacks manufacturing capabilities. With a strong policy push, the country is now eyeing a demand of $272 billion by 2032 and aims to become a global semiconductor manufacturing hub.

POLICY PUSH

The production-linked incentive (PLI) scheme, introduced in December 2021, has acted as a catalyst, with big players like US-based chipmaker Micron, salt-to-software conglomerate Tata group, and the Murugappa group setting up manufacturing facilities.

The government has also announced a substantial allocation of $10 billion under Semicon India Program for the semiconductor and display manufacturing ecosystem. Of that, around $2 billion was disbursed last fiscal (FY24) and another $4 billion is expected to be spent in FY25.

“The centre’s initiative is not just about silicon manufacturing; it extends to areas like assembly, testing, and packaging,” says Navin Bishnoi, Country Head at Marvell India & AVP Central Engineering. These areas, known as OSAT (Outsourced Semiconductor Assembly and Test) and ATMP (Assembly, Testing, Marking, and Packaging), are integral to building a robust semiconductor ecosystem.

“The roll-out of comprehensive policies, coupled with incentives and funding, has laid the groundwork for expanding manufacturing capabilities in India,” Bishnoi tells Business Today. The response has been encouraging, with four major announcements, he says, marking a significant step forward in strengthening India’s position in the global landscape.