India needs to move beyond chip manufacturing, use Indian chips in products designed and made locally: Report
New Delhi, September 21
India's next phase of semiconductor development should move beyond simply increasing chip manufacturing capacity and focus on building an ecosystem where chips designed, produced and packaged in the country are increasingly used in products designed and manufactured domestically, according to a report by EY-IESA.
The report said India's semiconductor journey has entered a decisive phase, with the foundations of a domestic ecosystem being established through public investments, anchor manufacturing projects, expanding design capabilities and a broader policy framework under Semicon India 2.0.
However, the next stage may require India to focus on building a self-sustaining semiconductor economy based on domestic demand, innovation and greater value addition across the electronics value chain.
"The objective may not merely be to manufacture chips in India, but to create an ecosystem where chips designed, produced and packaged in India are increasingly deployed in products designed and manufactured within the country itself," the report stated.
India is projected to become a semiconductor consumption market of approximately USD 200 billion by 2035. However, a significant share of this demand is currently embedded in imported electronic systems, modules, kits and assembled products, resulting in limited domestic value capture, the report said.
The report said this presents a major opportunity for India to strengthen domestic system design, electronics product development and advanced manufacturing across several sectors.
These include consumer electronics, automotive, industrial automation, telecommunications, aerospace, defence, medical devices and artificial intelligence.
According to the report, strengthening these downstream industries can help turn semiconductor demand into a driver of indigenous semiconductor production. Creating such downstream demand may be as important as supporting supply-side investments in semiconductor manufacturing.
The report highlighted three strategic strengths that India can leverage -- a globally competitive semiconductor design ecosystem, one of the world's fastest-growing electronics markets and an increasingly attractive manufacturing base supported by a large pool of talent.
It said leveraging these strengths to develop globally competitive products and platforms could help India establish a distinct position in global semiconductor supply chains.
Rather than following the same path as traditional semiconductor-producing countries, India has an opportunity to build a model centred on design-led manufacturing, advanced packaging, compound semiconductors, trusted supply chains and system-level innovation, the report said.
The report also said global supply chains are continuing to diversify as countries look for more resilient sources of semiconductor production. This could create an opportunity for India to emerge as a trusted partner in the global semiconductor ecosystem.
The coming decade, therefore, represents more than an opportunity to build semiconductor manufacturing capacity, according to the report. It could also help establish India as a significant centre for semiconductor innovation, product development and electronics manufacturing.
— ANI
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