SEMICON India 2026 and India's Semiconductor Policy
As SEMICON India 2026 commences in New Delhi, it highlights the need for India's semiconductor policy to evolve beyond just fabrication units, focusing on the entire ecosystem supporting these units.
Globalised Supply Chain and Strategic Focus
- India's role in the global supply chain does not require complete self-sufficiency.
- Reduce dependency on materials, equipment, and technologies vulnerable to geopolitical risks.
- Government and industry should work to keep supply channels open and capitalize on diversification opportunities.
Value Chain Exposure and Strategic Dominance
- India is involved in the entire semiconductor value chain: design, automation, materials, equipment, fabrication, assembly, and packaging.
- Focus on strategic dominance in select areas like design and testing, while enhancing capabilities in IP and chemicals.
Policy Evolution and Localisation
- The initial semiconductor policies focused on attracting investments, resulting in several chip plants at various stages of implementation.
- Shift policy to support localisation through:
- Incentives for companies producing silicon wafers, high-purity gases, and photoresists.
- Link incentives to output milestones instead of upfront capital subsidies.
- Leverage government procurement to localize key supply chain nodes.
- Develop institutional testing capacity to certify local vendors.
Training and International Collaboration
- Provide access to advanced training for the local talent pool.
- Strengthen inter-government ties with other chip manufacturing nations for joint research and supply chain resilience.
Fiscal Support and Holistic Effort
- Incorporate penalties in fiscal support if tech transfer and localisation metrics are unmet.
- Ensure partnerships with reliable partners, long-term financing, and project expertise.
- Focus on yield management involving process engineering, clean room operation, lithography, and packaging reliability.
- Develop a fab-ready workforce through apprenticeship programs.
