In recent years, India's wish to establish itself as a prominent player in the global semiconductor industry has gained significant traction. To encourage the establishment of semiconductor manufacturing facilities in India, the government has implemented schemes like the production-linked incentive (PLI) and design-linked incentive (DLI). By providing additional incentives, tax exemptions, and relaxed regulations, it is anticipated that more investments will be drawn into this sector. With a growing emphasis on self-reliance and local manufacturing, the country aims to shorten the journey towards achieving a sustainable, self-dependent semiconductor ecosystem. Drawing inspiration from the huge potential that lies ahead and the success stories of some countries in the manufacturing space in the past, India is strategically leveraging its strengths and charting a course toward becoming a formidable contender in this transformative field.
Learning from the success of other countries
One of the pivotal takeaways from the experienced countries' semiconductor journey is the need to focus on India's unique strengths. While achieving end-to-end manufacturing capabilities is essential, it's equally crucial to enhance the assembly and packaging sectors. This holistic approach ensures that the entire supply chain is robust, reducing dependency on external sources. Additionally, India's prowess in design engineering positions it as a key player. Capitalising on this strength and integrating it seamlessly into the broader ecosystem is paramount for sustainable growth.
Building on momentum
India is currently witnessing a surge of momentum in its semiconductor industry. Industry’s key players are making substantial investments in the country, bolstering the foundation for semiconductor manufacturing. However, it's imperative to ensure that this momentum is not lost. The nation must identify the critical components that contributed to this surge and proactively work to sustain them. By identifying key elements and best practices, India can effectively stitch together the efforts of various stakeholders, ensuring that the industry continues to thrive.
Balancing aspirations and realities
While the vision of making India a global semiconductor manufacturing hub is compelling, it's essential to strike a balance between aspirations and practical realities. The journey toward self-dependence in semiconductor manufacturing is a long one, and India must remain watchful to avoid over-promising and under-delivering. Acknowledging the historical tendency to fall short of expectations in this domain, India should focus on implementing lessons learned from other successful semiconductor manufacturing nations, such as Taiwan. Learning from their experiences can provide invaluable insights, enabling India to accelerate its progress.
Integrating design excellence
India's strength in design engineering presents a unique advantage. Rather than simply pursuing manufacturing capabilities, the country should aim to create a synergy between its design prowess and manufacturing aspirations. This approach allows India to offer a comprehensive suite of services, combining design, engineering, and manufacturing. By maintaining a stronghold in design engineering while venturing into manufacturing, India can establish a competitive edge that sets it apart in the global semiconductor landscape.
Nurturing indigenous product companies
A crucial aspect of India's semiconductor journey involves nurturing domestic product companies. This step can foster a robust local consumer base, reducing dependence on an international clientele. The government's initiatives, such as the production-linked incentive (PLI) and design-linked incentive (DLI) schemes, play a major role in supporting such indigenous companies. By creating an environment conducive to home-grown innovation, India can generate high-volume products that bolster its manufacturing requirements.
Challenges and collaborations
While India embarks on this ambitious journey, challenges loom on the horizon. The semiconductor industry requires meticulous precision, extensive resources, and a skilled workforce. To address these challenges, India must streamline its regulatory processes and create a favourable business environment. Furthermore, strategic collaborations with global players are essential. Partnerships can help India overcome its initial shortcomings and expedite the development of its semiconductor ecosystem.
A vision for the future
India's path to establishing a self-dependent semiconductor ecosystem is a multi-faceted journey that necessitates a comprehensive approach. By integrating manufacturing capabilities with design excellence, leveraging global partnerships, and learning from the successes and pitfalls of other nations, India can expedite its progress. With the right blend of strategic planning, investments, and continuous adaptation, India has the potential to emerge as a significant player in the trillion-dollar semiconductor industry. The nation's journey may be long, but with determination and foresight, the destination is within reach.
Author is Senior Director & Site Head at Analog Devices Bangalore Limited (ADBL).
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