The recent Tech Today Congress held in Bengaluru saw industry experts and leaders convene to discuss the imperative need for India to establish its own semiconductor supply chain. The panel discussion, titled ‘The World on a Chip,’ shed light on various aspects of India’s semiconductor mission and explored the potential benefits of developing an indigenous chip industry.

The Indian government’s commitment to nurturing the semiconductor ecosystem, including domestic manufacturing, was underscored by its announcement of a substantial financial incentive of Rs 76,000 crore. However, amidst the enthusiasm, there have been voices of skepticism questioning the necessity and significance of investing in chip manufacturing in India. These doubts were thoroughly examined and debated during the panel discussion at the Tech Today Congress organized by Business Today.

David Reed, CEO of Vedanta Foxconn Semiconductor, emphasized the alarming amount of money spent on importing semiconductors into India. He pointed out that in 2020 alone, India imported semiconductors worth $53 billion, and this figure is projected to skyrocket to $100 billion by 2023 and a staggering $400 billion by 2027. Reed warned that failing to seize this opportunity to establish a robust chip manufacturing sector in India would have dire consequences.

Reed referred to the ongoing global expansion of chip manufacturing plants, also known as fabs, across various countries. These fabs are playing a pivotal role in meeting the ever-growing demand for semiconductors, as the market is expected to double from $600 billion to $1.3 trillion in the next seven years. India, being a major consumer of semiconductors, cannot afford to be left behind in this critical technological realm.

Satya Gupta, President of the VLSI society, provided a strategic perspective on the importance of semiconductors for India. He emphasized that it is not merely about having this technology; it is about not having it. Gupta stressed the need for India to have a well-deserved seat at the global semiconductor table and actively participate in semiconductor geopolitics. Considering that India is poised to become the largest consumer of semiconductors, it is crucial for the country to have a strong domestic chip industry to meet its burgeoning demands.

Neil Shah, Vice President of Research at Counterpoint, shed light on the necessity of establishing a robust semiconductor supply chain in India to support the country’s ambitions of setting up manufacturing units for finished goods. Shah emphasized that waiting for chip imports to fuel local production is not a viable strategy. He pointed to countries like China and Taiwan, where the entire ecosystem of suppliers and chipsets is centered around local manufacturing facilities, ensuring a seamless and efficient production process. In light of the concentrated nature of the current supply chain, the disruptions caused by the COVID-19 pandemic have highlighted the urgency for diversification and the need for India to have a self-sufficient chip industry.

Counterpoint’s data revealed that India’s semiconductor consumption is expected to skyrocket from $27 billion in 2022 to a staggering $64 billion by 2026 in terms of value alone. This exponential growth underscores the immense potential and opportunities that lie ahead if India can establish a robust semiconductor supply chain.

Hitesh Garg, India Country Manager at NXP Semiconductors, highlighted the increasing demand for semiconductor fabs to cater to the evolving needs of the automotive industry. Garg emphasized the necessity of product innovations in the ecosystem, such as electric two-wheelers and autonomous vehicles. With India poised to become the third-largest automotive consumer in the world, the automotive sector will be a key driver for next-generation chips and will significantly contribute to the growth of India’s semiconductor industry.

Santhosh Kumar, President of Texas Instruments, provided insights into the considerations that companies undertake when deciding to set up fabs. He explained that large companies often opt for lower-risk options, such as expanding existing facilities, rather than venturing into new territories. However, Kumar acknowledged that India presents a high-opportunity market and emphasized the need to assess its financial viability. While expanding current operations may seem more convenient, companies must recognize India’s potential and the long-term benefits of establishing a presence in the country.

Given India’s ambition to become a global manufacturing powerhouse, it is projected to consume 11% of the global semiconductor market. Therefore, haviSemiconductorMission ng an in-house supply chain for chips is not only essential but also a strategic advantage. Building a robust domestic semiconductor industry will enhance India’s self-reliance, create employment opportunities, foster innovation, and position the country at the forefront of technological advancements.

The discussions at the Tech Today Congress underscored the urgent need for India to build an in-house semiconductor supply chain to secure its position in the global semiconductor landscape, ensure self-sufficiency, and capitalize on the tremendous economic and technological potential that lies ahead.

Note: Some of the content part sourced from the “Business Today Website”