Price Tag for India's Semiconductor Vision: $180 Billion and Counting

Key Insights 

1. The investment required from both the public and private sectors will be $135 billion to $180 billion, and the government must contribute at least a third to lower risks and encourage foreign investors.
    
2. The white paper, named Future of India's Semiconductor Industry, aims at creating a semiconductor value chain worth between $120 billion and $150 billion, putting purpose before participation.

India's Aspirations to Cease to be a Chip Consumer but be a Chip Power

India's plans concerning semiconductors now have an officially approved and budgeted plan. 

The Frontier Technologies Hub of NITI Aayog has unveiled the document amidst Finance Minister Nirmala Sitharaman.

The Union Minister of Electronics, Ashwini Vaishnaw, was also present, along with policymakers, industry representatives, and academicians also present. 

The plan foresees cumulative investments from the public and private sectors for the country's semiconductor ecosystem, estimated to amount to about $135-$180 billion over ten years.

The government support cannot be avoided. 

Short-term, the task is gigantic. To set up a contemporary analogue fabrication plant may take up to $5 billion, and setting up an advanced node fab might cost even more than $15 billion. 

The private funding will continue to be conservative, with no financial assistance from the Indian government in securing these ventures. 

At this point of geopolitical changes in global supply chains, India's reliance on foreign chips poses a significant threat to the state's economic security.

Opportunity by the Numbers: Where India is Heading

The opportunity for semiconductors in India is no longer theoretical; it can be quantified. The following table highlights the key objectives of NITI Aayog’s Roadmap.

The roadmap projects that India will build a semiconductor value chain worth $120–150 billion by 2035, accounting for 10–13% of the global semiconductor market and achieving self-sufficiency in 35–50% of domestic chip demand. 

What Ordinary Indians Stand To Gain From a Chip-Making India?

Semiconductors sound far-fetched to many Indians. They shouldn't. Semiconductors are found in phones, automobiles, equipment in hospitals, and power grids.

“Dependence on imported black-box technology” is among the top strategic challenges for “Viksit Bharat,” according to NITI Aayog Vice Chairman Ashok Kumar Lahiri. 

Semiconductors are integral to artificial intelligence, defence, mobility, energy, communications, and citizens' services. 

A chip industry would provide affordable electronics, employment opportunities, and more reliable supplies of goods.

These are the directions India needs to take according to the NITI Aayog report: maturity logic and mixed signal nodes.

Production of compound semiconductors, advanced packaging, and secure manufacturing of semiconductors for the defence, aerospace and other strategic sectors. 

These targets are concrete and translate directly into industrial jobs and a decrease in India's dependence on global supply chains.

Experts Say India Must Change Strategy, Not Just Spend More

“The NITI Aayog report highlights that the 'race' cannot be won by India merely continuing to participate in the same race,” according to the report. 

India must make a course correction, aiming to become the ecosystem player in the global semiconductor industry that the industry cannot function without. 

“As a nation, we are determined to make a shift from our position of being a large consumer of semiconductors to that of becoming an indispensable part of the global semiconductor value chain.”

That's what Finance Minister Sitharaman has said. 

Advanced packaging technology, compound semiconductors, wide band gap material technology, and artificial intelligence native chip design are among the many opportunities India can leverage on. 

India's semiconductor strategy will revolve around five pillars Pioneering, Policy and Investments, Production, People, and Partnership.

Conclusion

India's approach to becoming a chip maker is ambitious, clear, and timely. With appropriate investment by the government, the necessary private capital will flow. It's up to the coming decade which path India chooses: a chip maker or chip buyer.

FAQS

Why, according to NITI Aayog, should India switch tracks from semiconductor chip racing?

As per NITI Aayog, India should abandon the conventional wafer fabrication race, which is highly capital-intensive and one where a very few players dominate internationally. Instead, NITI Aayog suggests that India must switch tracks to the “More-than-Moore” age, where emphasis is laid upon advanced packaging, system-level integration, and smart manufacturing.

Is it worth spending 20 lakhs to pursue a CSE course at MIT Manipal?

It may be deemed worthwhile to spend (approximately $20 - $25) Lakhs in pursuing a course such as Computer Science Engineering in MIT Manipal, provided that you are either self-funded or borrowing only a little money. However, taking a huge amount of loans may not be recommended.