India’s semiconductor industry is experiencing a significant boost as several chip manufacturers are eyeing the country as a potential hub for assembly, testing, marking, and packaging (ATMP) facilities and manufacturing plants.
This newfound interest follows US-based Micron Technology’s announcement to construct a state-of-the-art semiconductor ATMP plant in Gujarat under the government’s $10-billion production-linked incentive (PLI) scheme. Let’s explore how Micron’s pioneering move is shaping the landscape and attracting other players to invest in India’s burgeoning semiconductor ecosystem.
Micron’s Bold Investment Paves the Way
Micron Technology’s decision to establish a $2.75-billion semiconductor ATMP plant in Gujarat sent ripples of excitement throughout the industry. As a prominent player in memory chips, Micron’s entry into the Indian market has acted as a catalyst for other companies that were previously hesitant to invest in the country. The move is creating a compelling case for global chip manufacturers to seriously consider India as a prime location for their expansion plans.
India’s Emerging Appeal in the Semiconductor Sector
India’s semiconductor industry has been gaining traction over the past few years, but the absence of local supply chains for chip manufacturing was a crucial hindrance. Micron’s announcement, however, has shed light on the immense potential of the Indian market, prompting other companies to recognise the opportunities and advantages of setting up operations in the country. The government’s $10-billion India semiconductor mission, initiated in 2021, has further facilitated the industry’s growth, providing funding support and incentives to semiconductor design firms and startups.
A Beacon for the Supply Chain and Fab Companies
Micron’s investment is not only attracting chip manufacturers but also creating a ripple effect in the supply chain. Providers of essential resources like gas, minerals, equipment, and logistics are now exploring the possibilities of establishing their presence in India. The ripple effect is expected to bolster the semiconductor ecosystem and promote a robust manufacturing network in the country.
Skilling India for Semiconductors
To bolster India’s expertise in the semiconductor domain, the government is taking proactive measures. Under its skilling programme, the government plans to offer on-the-job training to interns, allowing them to gain valuable experience at chip fabs abroad. This initiative will enhance the skillset of the Indian workforce and contribute to the growth of a highly skilled talent pool in the semiconductor industry.
Overcoming Setbacks with Resilience
Though the Vedanta-Foxconn joint venture faced challenges, the government remains confident that these setbacks will not deter the industry’s long-term prospects. Both companies plan to apply independently for a 40-nanometer plant, demonstrating their commitment to India’s semiconductor mission.
Design-Linked Incentive Scheme to Attract Larger Firms
To foster innovation in the semiconductor sector, the government is considering expanding the design-linked incentive (DLI) scheme to include larger foreign and Indian firms. The DLI programme offers incentives on net sales of specified designs contributing to Indian intellectual property (IP). This move will encourage more companies to invest in India and collaborate with local startups, fostering a thriving ecosystem of innovation.
India’s Push for Semiconductors in AI
Artificial intelligence (AI) is a crucial focus area for the Indian government, and a global AI conference scheduled for September aims to encourage big fabless companies to design and co-own IP in India. By qualifying for financial support under the DLI scheme, these companies can harness India’s potential as an AI innovation hub.
India’s semiconductor landscape is witnessing a transformative phase, with Micron Technology’s investment acting as a game-changer. The government’s proactive initiatives and incentives have paved the way for more chipmakers to explore India’s potential as a global semiconductor manufacturing destination.
As the industry continues to grow, India is well on its way to becoming a key player in the semiconductor sector, attracting investment, fostering innovation, and nurturing a skilled workforce for future ventures.
