How India plans to build semiconductors from scratch

Union minister for Railways, Communications, and Electronics & IT Ashwini Vaishnaw says India is working on the entire semiconductor value chain and will roll out the first 'Made in India' chip by December 2024.

"The semiconductor value chain starts with design and our design capabilities are among the best in the world," says Vaishnaw.

"If you look at the design ecosystem, close to 30% of the global talent is in India. Some of the most complex chips are designed in India," he says.

The next part of the value chain is semiconductor fab, then comes the assembly, testing, marking, and packaging (ATMP), Vaishnaw says. On the semiconductor journey, India will move from being a back office to being a product development ecosystem, he says.

"For fab, we started the India Semiconductor Mission. Micron plant is under construction," says Vaishnaw. Micron Technology has announced plans to build a new assembly and test facility in Gujarat with an investment of up to $825 million.

"Soon, we will see two or three more approvals for semiconductor fab," Vaishnaw says without divulging details.

"We are moving from design to fab to the ATMP ecosystem. Throughout this value chain, all the components will be developed in India. We have our strength in design. Now, as a natural corollary, we have to build the strength in fab and ATMP. We need to be in all three parts of the value chain and that's what we are working on," says Vaishnaw.

India has a roadmap to develop the semiconductor industry over the next 20 years, says the Union minister. "Within the next five years, our target is to have 3-4 high-volume fabs and create a niche and leadership in at least one product category. That is the way we are working. We will see the first chip rollout in December 2024," he says.

The Union minister says the world was earlier looking at India as a consumer of technology. "Now the world is looking at us as a co-creator and as a partner in development," he says. "Our focus will be on picking up some 10-12 big technologies, keeping a laser-sharp focus on them and developing those technologies the way we have developed the digital stack. We will build a series of technologies which can then be exported," Vaishnaw says.

U.S. chipmaker AMD is investing around $400 million in India in the next five years. This includes AMD's new campus in Bengaluru, its largest R&D facility in the world.

In the Interim Budget 2024, the capital outlay for the development of semiconductors and display manufacturing ecosystem was raised by 130.1% to ₹6,903 crore for the next fiscal compared with ₹1,503 crore in the ongoing financial year.