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PM Modi highlighted three pivotal factors driving the semiconductor sector’s growth: the reform-oriented nature of the government, the expanding manufacturing base, and India’s burgeoning aspirational market
On September 11th, Prime Minister Narendra Modi inaugurated Semicon India 2024, a three-day event, and conveyed a compelling message to the global semiconductor industry. He emphasized that the current climate in India is highly advantageous for investment, citing the government’s stable policies and improved business environment. PM Modi highlighted three pivotal factors driving the semiconductor sector’s growth: the reform-oriented nature of the government, the expanding manufacturing base, and India’s burgeoning aspirational market.
To position itself as a global leader in the Fourth Industrial Revolution and achieve its $5 trillion economy target, India must cultivate a robust semiconductor industry. Semiconductors are foundational to modern technology, fueling innovations in smartphones, computers, and advanced manufacturing systems. A strong domestic semiconductor sector is crucial for supporting technological advancements, economic growth, and strategic autonomy. It would mitigate reliance on imports, enhance economic stability, and generate high-paying jobs. Additionally, semiconductors are essential for national security, underpinning defense and infrastructure systems and bolstering self-reliance. By advancing this industry, India
To position itself as a global leader in the Fourth Industrial Revolution and achieve its $5 trillion economy target, India must cultivate a robust semiconductor industry.
will enhance its competitiveness in electronics, automotive, and telecommunications, attracting significant global investment. Ultimately, semiconductors are central to driving digital transformation and smart manufacturing, both pivotal to succeeding in the Fourth Industrial Revolution.
Semiconductor Industry: Powerhouse to the economic landscapes of the US, China, and Japan
In the United States, the semiconductor sector generated around $287 billion in revenue in 2022, accounting for nearly 50% of the global market. It also supports over 250,000 direct jobs and 1 million additional jobs across the supply chain, driving economic growth and innovation. The industry plays a crucial role in national security, with its advanced technologies being vital for defense systems and strategic applications. Furthermore, for every dollar spent in the semiconductor sector, approximately $3.50 is generated in the broader economy, demonstrating its multiplier effect across various industries like automotive and consumer electronics.
China’s semiconductor industry has grown rapidly, fueled by over $150 billion in investments in the past decade aimed at achieving self-sufficiency. In 2023, the industry was valued at around $200 billion, with China striving to meet 70% of its semiconductor demand domestically by 2025. Investments in research and development have propelled growth in key sectors like 5G and AI, helping China move toward its goal of becoming a high-tech leader by 2035.
Japan’s semiconductor market, valued at $48 billion in 2023, remains a significant player in global production and technological innovation, with companies like Sony and Toshiba leading the way. Japan exported $30 billion worth of semiconductor products in 2022, strengthening its trade balance. With more than $10 billion invested annually in semiconductor research and development, Japan continues to drive advancements in consumer electronics, robotics, and automation. Strategic international partnerships further enhance Japan’s role in the global semiconductor supply chain.
India’s Expanding Semiconductor Landscape
India has embarked on an ambitious journey to establish itself as a global semiconductor manufacturing hub. With the Modi government’s strategic initiatives and the support of private-sector investments, the country is rapidly transforming its semiconductor landscape. Recent developments, including the approval of major semiconductor projects and the establishment of advanced facilities across India, signal the country’s commitment to becoming a key player in the global semiconductor industry. The India Semiconductor Mission (ISM) has been pivotal in reshaping this landscape, creating opportunities for economic growth, innovation, and technological self-reliance.
The India Semiconductor Mission is the vision of the Prime Minister Modi to make India a leader in the electronics manufacturing, semiconductor design, precision manufacturing & innovation. This vision of AtmaNirbharta in electronics & semiconductors was given further momentum by the Hon’ble Prime Minister Modi. The ISM, launched with the goal of building a robust semiconductor ecosystem, is now at the forefront of India’s efforts to position itself as a global semiconductor
The India Semiconductor Mission is the vision of the Prime Minister Modi to make India a leader in the electronics manufacturing, semiconductor design, precision manufacturing & innovation.
powerhouse. India Semiconductor Mission (ISM) has-approved five semiconductor units who will all receive central and state government subsidies under the programme for development of semiconductors and display manufacturing ecosystem in India with a total outlay of INR 76,000 crore.
Key Semiconductor Facilities Emerging Across India
India’s expanding semiconductor landscape is being shaped by several critical facilities under construction across the country. These state-of-the-art projects not only symbolize India’s growing technological prowess but also contribute to the country’s ambition of achieving self-reliance in semiconductor manufacturing.
1. Micron’s OSAT Facility, Sanand, Gurjat: One of the key players in India’s semiconductor expansion is Micron Technology, an American chipmaker. The company is building an Outsourced Semiconductor Assembly and Testing (OSAT) facility in Sanand, Gujarat, with a total investment of $2.75 billion. The project, approved in June 2023, is co-funded by the central and Gujarat governments, which are contributing 50% and 20% of the investment, respectively.
This facility will focus on assembling and testing DRAM and NAND products, catering to both domestic and international markets. Expected to produce the first made-in-India chips by mid-2025, Micron’s plant will play a crucial role in India’s efforts to integrate more deeply into the global semiconductor supply chain.
2. India’s First Chip Fabrication Plant, Dholera, Gujrat: Another monumental step in India’s semiconductor journey is the construction of the country’s first chip fabrication plant in Dholera, Gujarat. This mega-fab is a joint venture between Tata Electronics and Powerchip Semiconductor Manufacturing Corporation (PSMC), one of Taiwan’s leading chipmakers. With a massive investment of INR 91,000 crore, this facility aims to produce 50,000 wafers per month… . To be continued
(The Writer is MP, Rajya Sabha & National General Secretary of BJP)