India’s Semiconductor

Domestic Semiconductor Production Initiative

• Government Announcement:
  • India’s first domestically manufactured semiconductor chip will roll out in 2025.
  • Aim: Reduce import dependency and boost domestic production.
• Key Manufacturing Facilities Under Construction:
  • Tata Semiconductor Assembly and Test facility (Morigaon).
  • Dholera Semiconductor Fabrication Facility (fab) by Tata Electronics & Taiwan’s Powerchip Semiconductor Manufacturing Corporation.

Semicon India Programme (2021)

• Objective: Develop semiconductor & display manufacturing ecosystem.
• Budget and Expenditure Trends:
  • FY23: Budgeted ₹200 crore → Spent ₹13 crore.
  • FY24: Budgeted ₹3,000 crore → Revised ₹1,503 crore → Spent ₹681 crore.
  • FY25: Budgeted ₹6,903 crore → Revised ₹3,816 crore.
  • RE for FY25 doubled compared to FY24, indicating better implementation focus.

Rising Import Dependency on Semiconductor Chips

• Import Trends (FY16–FY24):
  • Monolithic Integrated Circuits (ICs): ₹1.05 lakh crore in FY24 (2,000% increase from FY16).
  • Memory Chips: 4,500% increase from FY16.
  • Amplifiers: 4,800% increase from FY16.
• Share of Semiconductor Chips in Total Imports:
  • Monolithic ICs: Increased from 0.19% (FY16) to 2.09% (FY25, April-November).

Key Semiconductor Suppliers to India

• Major Suppliers (Past 10 Years):
  • China (Dominant supplier, except FY19).
  • Hong Kong, Japan, South Korea, Singapore, Taiwan.

India’s Role in the Global Semiconductor Value Chain

• Strengths:
  • Growing capabilities in assembly, testing, packaging (ATP), and fabrication (fab).
• Challenges & Gaps:
  • No major breakthroughs in critical areas such as:
    • EDA (Electronic Design Automation) software (chip design tools).
    • Core IP (patents & licensing).
    • Wafers & fab tools (raw semiconductor materials & manufacturing machinery).
    • Advanced chip design.

Way Forward

• India’s semiconductor industry is growing but faces challenges in core R&D, materials, and high-end manufacturing.
• The Semicon India Programme needs better execution to reduce reliance on imports.
• With increasing investments and strategic partnerships, India is positioning itself as a key player in semiconductor assembly and fabrication.