India Emerged as a Global Hub for semiconductor design and R&D

Syllabus :GS3/Economy

In Context

• As per Industry estimates, India has emerged as a global hub for semiconductor design and Research Development.

Semiconductors

• They are also called chips or integrated circuits, which are tiny electronic circuits made mainly from silicon. 
• They contain millions or billions of components like transistors, diodes, capacitors, and resistors that work together to process and control electrical signals. 
• They are crucial for modern electronic devices and support technologies in communication, computing, healthcare, transportation, defense, and clean energy by enabling devices to process, store, and transmit data.

Importance  of Semiconductors

• Digital Economy: Semiconductors power devices such as smartphones, computers, and communication networks, making them essential for the digital economy.
• Strategic: Trusted semiconductor supply chains are crucial for critical infrastructure, defence systems, and cyber security.
• Emerging Technologies: Technologies like Artificial Intelligence (AI), 5G, Internet of Things (IoT), electric vehicles, and quantum computing rely heavily on semiconductor chips.
• Economic and Industrial Growth: The global semiconductor market is expected to reach USD 1 Trillion by 2030 with India’s market occupying a substantial portion of it.

Challenges in Semiconductor Manufacturing in India 

• Semiconductor manufacturing requires extremely high investment in R&D and infrastructure, creating high entry barriers.
• The global chip industry is dominated by a few countries and companies, making advanced technology difficult to access.
• Chip production involves 500–1,500 steps and needs specialised materials, clean water, and uninterrupted power which is a complex process.
• India has many design engineers but lacks skilled workers for fabrication plants (fabs).
• India has limited original research in semiconductor design.
• Major global players worry about policy stability, cumbersome administration, high tariffs, and inadequate infrastructure.
• Skill development and semiconductor policy are handled by different ministries, causing coordination problems.

Various steps of the government 

• The Government launched the ‘Semicon India Programme’ for the development of semiconductor and display manufacturing ecosystem in the country.
  • Union Budget 2026-27 announced India Semiconductor Mission 2.0 for equipment and materials, design full stack, Indian IP and fortify supply chains.
• The Design Linked Incentive (DLI) Scheme promotes design, development, and deployment of semiconductor products such as Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores.
• Global Capability Centers (GCCs):   India hosts about 7% of the world’s Global Capability Centres (GCCs) of Semiconductor domain and employs nearly 20% of the global semiconductor chip design workforce.
  • Indian engineers in GCCs are designing and developing advanced semiconductor technologies, including 2 nm chips.
• The Department of Science and Technology (DST) is implementing two complementary initiatives:
  • Anusandhan National Research Foundation (ANRF) Supports academic research, industry collaboration and translational research across priority areas such as AI, deep tech, climate, health, semiconductors and advanced materials, with an outlay of ₹50,000 crore over five years
  • Research, Development and Innovation (RDI) Fund : The scheme supports late-stage 79 technology development and commercialisation focusing on critical technologies such as AI, quantum computing, robotics and biotechnology.
• Indian Nanoelectronics Users’ Programme (INUP) supports R&D in micro and nanoelectronics using nano-centres established by MeitY at IISc Bengaluru and IITs.

Conclusion and Way Forward 

• India’s electronics industry is rapidly expanding, with semiconductors driving the growth.
• Government initiatives like the India Semiconductor Mission, SEMICON India Programme, and global partnerships (iCET) aim to reduce imports and build domestic capabilities
• Semiconductors are crucial for India’s digital economy and national security.
• Despite challenges in infrastructure, technology, and talent, government initiatives aim to build a strong domestic ecosystem, enabling India to become a key player in the global supply chain.

Source :PIB