Shiv Nadar University recently hosted the GTIPA Summit 2024 in New Delhi. The event witnessed the attendance of prominent personalities from various industries and government bodies.. One of the highlights of the event was a panel discussion titled “Future of Semiconductors: India’s Emerging Role and Global Challenges”, which centred around India’s growing prominence in the global semiconductor landscape amidst unprecedented challenges and opportunities in the trillion-dollar industry.
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Moderated by Stephen Ezell, Vice President of Global Innovation Policy at the Information Technology & Innovation Foundation, the discussion featured Dr. Hemang Shah, Senior Director, Government Affairs, Applied Materials India, and Rajeev Khushu, Director of Corporate Affairs and Government Relations, Texas Instruments.
Ezell opened the session by emphasizing the transformative potential of the semiconductor industry, projected to grow from $600 billion to $1 trillion by 2030. He highlighted the complexity of semiconductor manufacturing, which demands excellence across over 500 critical factors: “The semiconductor production process is incredibly intricate, encompassing multiple stages—from the creation of wafers that form the foundation of chips, to R&D, design, machine tooling, fabrication, and final testing and packaging. Companies consider up to 500 factors when deciding where to establish a semiconductor fab. This means any country, state, or city aiming to compete must excel in all these factors and outperform global competitors. The complexity of semiconductor manufacturing is unparalleled—so much so that advanced TSMC sub-2 nanometer fabs account for the moon’s gravitational effects on Earth during production,” he said.
“For nations like India aspiring to enter the semiconductor industry, this challenge is monumental. The policy environment must be as sophisticated and precise as the engineering itself to attract and sustain this highly demanding sector,” added Ezell urging India to refine its policy environment to fully leverage its strengths in semiconductor design and engineering.
Rajeev Khushu, representing Texas Instruments and the India Electronics and Semiconductor Association (IESA), provided an overview of India’s semiconductor ecosystem. “India has been experiencing rapid growth in its semiconductor market, currently valued at approximately $40 billion. This figure is expected to surge to nearly $100 billion by 2030, representing around 10% of the global market. While this is significant, it still falls short compared to the size of India’s population. However, India is steadily becoming more relevant in the global semiconductor landscape. A key challenge lies in decision-making. Of the $40 billion currently consumed in India, many decisions are made outside the country. For instance, in the case of products like the iPhone, most decisions originate in the US, limiting India’s control over choices. This dynamic, however, is beginning to shift, contributing to the accelerated growth expected over the coming years,” said Khushu.
Khushu commended initiatives like the Design-Linked Incentive (DLI) and Production-Linked Incentive (PLI) schemes, which are driving investments and fostering innovation in the country. He also highlighted Karnataka’s SAFAL Program, a semiconductor fabless accelerator lab that has nurtured over 70 startups, with several achieving global recognition. “India has long been a significant exporter and producer of chemicals, but it currently lacks the capability to produce semiconductor-grade materials. To address this, the government is working on policies to incentivize companies to invest in this area and integrate India into the global semiconductor value chain. For example, a report by IESA (India Electronics and Semiconductor Association) highlighted the need for such incentives to strengthen the sector,” said Khushu.
He further added: “Texas Instruments (TI) recognized India’s potential early on, establishing operations here in 1985, well before India’s economic liberalization in the 1990s. Today, India contributes 23% of the world’s semiconductor design engineers—a remarkable achievement. Semiconductor design has become a cornerstone of India’s expertise, with major companies like Qualcomm hosting their largest development centers in cities like Bengaluru, Hyderabad, and Delhi. Although India’s design capabilities primarily support global companies, there is now a shift towards fostering homegrown innovation. The Ministry of Electronics’ design incentive program aims to boost the growth of fabless semiconductor companies, with a target of nurturing 100 such firms. This initiative is critical to leveraging India’s strengths in design.”
The government is also planning to allocate more patient capital to support these companies, and early signs of progress are evident with a few successful exits already being reported, commented Khushu while also reiterating that the focus on design and innovation is set to play a pivotal role in India’s semiconductor journey.
The Talent Advantage of Indian Semiconductor Industry
Both Khushu and Dr. Shah praised India’s exceptional talent pool, which produces 23% of the world’s semiconductor design engineers. India’s emphasis on STEM education, coupled with a strong work ethic and adaptability, has positioned it as a global leader in design engineering. Dr. Shah, reflecting on his experiences with Applied Materials and Qualcomm, attributed India’s success to its ability to attract global talent, its design-led infrastructure, and its integration into global value chains.
“We all own multiple devices—phones, laptops, tablets, and even wearable tech. Look around, and you’ll notice cameras and other gadgets, all of which have one thing in common: chips. In recent years, delays in booking cars, for example, weren’t due to engines being unavailable but because infotainment systems or ADAS (Advanced Driver Assistance Systems), both reliant on chips, were stuck in production bottlenecks,” he said highlighting the demand drivers for the semiconductor industry.
“Another major trend reshaping our world is AI. Far from being just a buzzword, AI is driving productivity and enabling transformative use cases. However, as AI becomes more pervasive, there’s a shift in how it operates. Currently, AI processes often rely on distant servers, consuming significant power and generating heat. Companies are now striving to make AI seamless, running directly on devices without needing constant internet connectivity. This evolution depends on chips pushing technological boundaries,” he added.
He also went on to state that Applied Materials played a pivotal in the Indian semiconductor industry as they worked with fabs, the manufacturing hubs for chips, providing essential equipment and materials that power their operations. “Recognizing India’s potential, Applied Materials established a presence here in 2002. Over the past 23 years, we’ve grown to a team of 8,000+ engineers, primarily focused on R&D. This ties into India’s broader strength in design expertise. Our work here spans diverse skill sets, including mechanical, material, and chemical engineering, demonstrating the country’s robust talent pool in these fields,” he added.
He stressed the need for India to develop semiconductor-grade materials and foster collaboration between academia, government, and industry to achieve self-reliance in manufacturing. He also stated that the Indian Semiconductor Mission has been a game-changer as this initiative has created opportunities for India to take the next leap in semiconductor innovation, positioning the country as a key player in the global semiconductor ecosystem.
Global Collaborations and Challenges
The panel also deliberated on the significance of the India-US Initiative on Critical and Emerging Technologies (ICET) announced earlier this year. This initiative aims to expand strategic technology partnerships between the two nations, with a particular focus on semiconductor readiness. However, panelists acknowledged the challenges India faces in creating a conducive policy and infrastructure environment to compete with global leaders like Taiwan and South Korea. The discussion concluded with a unanimous call to action for India to capitalize on its unique strengths while addressing its gaps in manufacturing capabilities. Panelists urged continued investment in R&D, infrastructure, and policy incentives to ensure India emerges as a key player in the global semiconductor ecosystem.
