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India’s semiconductor ecosystem is witnessing a transformative shift — from being a consumer-driven electronics market to an emerging design and manufacturing hub. While the country’s large-scale semiconductor fabrication projects are still in early stages, the chip design sector is already thriving, positioning India as a critical player in the global semiconductor value chain.

Policy Framework: Semicon India Mission

The turning point came in 2021, when the Government of India launched the ?76,000 crore Semicon India Programme, aimed at developing India into a global hub for electronics design and manufacturing.

• Manufacturing Push:The mission provides 50% capital support for semiconductor fabrication (fab) and assembly, testing, marking, and packaging (ATMP/OSAT) facilities, with states adding 20–25% additional incentives.
  • Ten major projects have been approved across Gujarat, Punjab, Uttar Pradesh, Odisha, Andhra Pradesh, and Assam.
  • Notably, Micron’s ?22,500 crore ATMP facility in Gujarat is under construction and expected to begin operations in 2024.
• Design Support:The Design Linked Incentive (DLI) and Chips to Startup (C2S)programmes aim to nurture a new generation of semiconductor designers.
  • The C2S initiative provides free access to high-end Electronic Design Automation (EDA) tools from Siemens, Cadence, and Synopsys, while targeting the training of 85,000 engineers in five years.

India’s Edge in Semiconductor Design

• India today accounts for 20% of the global semiconductor design workforce, hosting around 1.25 lakh chip designers who develop nearly 3,000 chips annually.
• Multinational firms like NVIDIA, Intel, AMD, and Qualcomm run large R&D operations from India, spread across Bengaluru, Hyderabad, Pune, and Noida.
• Even as the world faces a projected shortage of one million chip designers by 2030 (Deloitte), India’s deep talent pool offers a natural advantage.
• The country produces over 8 lakh engineering graduates annually, with around 5.7 lakh enrolled in electronics and related disciplines (2021–22).

Academia–Industry Collaboration: Bridging the Gap

• Despite government efforts, experts underline a persistent disconnect between academia and industry. Indian industries invest only 0.4% of profits in academic R&D, compared to 5–6% in the U.S. and South Korea.
• Strengthening collaboration — through joint research, funded Ph.D. programs, and internship pipelines — is essential to make graduates industry-ready and sustain innovation.
• Institutions like IITs, IISc, and IIITs have begun partnerships with leading toolmakers such as Synopsys, Lam Research, and Cadence to enable frontier-level projects at sub-10 nanometer design nodes.

Economic and Strategic Implications

• High-Value Employment: Semiconductor jobs have a multiplier effect of 6.7, driving indirect employment in allied sectors.
• Export Potential: Electronics exports are projected to quintuple by 2026, narrowing India’s trade deficit.
• Strategic Autonomy: Domestic chip capacity reduces dependence on foreign suppliers, vital for defence, telecom, and automotive sectors.
• Innovation Push: With rising patent filings and homegrown IP, India is consolidating its role in the global tech value chain.