The project approved under the India Semiconductor Mission will handle the testing and packaging of semiconductor chips before market launch.
Semiconductor Industry in India: Status
- Valued at approximately $38 billion in 2023, and is expected to surge to $100-$110 billion by 2030.
Initiatives for Semiconductor Industry:
- India Semiconductor Mission (ISM) 2.0: forproducing semiconductor equipment and materials in India, designing full stack Indian semiconductor intellectual property, etc.
- Semicon India Programme: To provide fiscal support (up to 50% of project cost) for semiconductor fabs, display fabs, and ATMP/OSAT facilities.
- Semiconductor & Display Fabs Schemes: Fiscal support for establishing semiconductor wafer fabrication and display manufacturing units in India.
- Design Linked Incentive (DLI) Scheme: Incentives for startups and MSMEs to promote indigenous chip design and innovation.
Challenges
- Import Dependency: India relies heavily on China for critical minerals, producing only 1% of rare earths despite holding 6% of global reserves.
- Skill Gap: While India has roughly 20% of the world's semiconductor design engineers, there is a shortage of workers skilled in actual fabrication.
- High Investment & Long Gestation: Semiconductor manufacturing is highly capital-intensive, carries high operational risks, and requires long payback periods.
- Intense Global Competition: India faces fierce rivalry from established manufacturing ecosystems in China, Taiwan, and South Korea.
