Three Forces that will Shape the Semiconductor Industry Landscape

By: Sudhakar Singh, Editor | Friday, 12 May 2023

Indian government is going to invest $2 billion in the semiconductor laboratory (SCL) in Mohali with focus on research and prototyping. It is a considerable increase from the previously decided investment of $1.3 billion. The announcement was made by Union Minister Rajeev Chandrasekhar at a semiconductor design roadshow in IIT-Delhi. The minister also unveiled the government’s plan to set up the India Semiconductor Research Institute as a centre of excellence. Following a hub-and-spoke model, it will work with institutes such as IIT Delhi.

Steps like these are an indication of where the semiconductor industry in India is headed. In a bid to become a global semiconductor manufacturing hub, such initiatives will play a key role. Let us try to understand how such endeavors will shape up the semiconductor manufacturing landscape in India.

Attracting global semiconductor manufacturers

Strengthening the semiconductor laboratories in India will signal to global semiconductor manufacturers that India is serious about becoming a hub for semiconductor manufacturing. This will lead to an increased flow of investment into the country, as companies will be more willing to establish manufacturing facilities in India, knowing that they will have access to state-of-the-art facilities, skilled labor force, and a conducive business environment.

One example of how investment into a semiconductor laboratory attracted global semiconductor manufacturers is the Taiwan Semiconductor Manufacturing Company (TSMC). In the 1980s, the Taiwanese government established an institute to promote semiconductor research and development. TSMC was established in 1987 as a joint venture between the government and private sector as a result of this initiative.

TSMC invested heavily in its semiconductor laboratory, which was equipped with the latest state-of-the-art equipment and technology. This allowed the company to offer high-quality semiconductor manufacturing services at a lower cost than its competitors. TSMC's laboratory became a hub for innovation and development, which attracted global semiconductor manufacturers to partner with them.

Building a skilled workforce

Setting up semiconductor laboratories will require the development of a skilled workforce in India. This will involve the training of engineers, technicians, and other professionals in the latest semiconductor technologies and processes. By building a skilled workforce, India will be able to attract more semiconductor companies that require a highly skilled workforce to carry out their operations.

An instance of how building a skilled workforce attracted global semiconductor companies is the case of Singapore. In the late 1980s, the Singapore government launched an ambitious plan to turn the country into a high-tech hub and attract global semiconductor companies to set up their operations in the country. To achieve the goal, the Singapore government invested heavily in education and workforce development programs to build a highly skilled workforce in the electronics and semiconductor industry. The government also established specialized training centers, such as the Institute of Microelectronics, to provide training and research opportunities for students and professionals.

As a result of these efforts, Singapore's workforce became highly skilled and knowledgeable in the technical aspects of semiconductor manufacturing and design. This made the country an attractive location for global semiconductor companies looking for highly skilled workers. Companies such as Intel, Texas Instruments, and Micron Technology were among the first to set up their operations in Singapore, attracted by the country's highly skilled workforce, favorable tax policies, and excellent infrastructure.

Developing indigenous semiconductor technology

Nurturing the semiconductor laboratories in India will encourage the development of indigenous semiconductor technology. This will enable India to reduce its dependence on importing semiconductor components and equipment and to create a more self-reliant manufacturing ecosystem. By becoming a global hub for semiconductor manufacturing, India will be able to develop cutting-edge semiconductor technology, which can be used to enhance its position as a leader in innovation and advanced manufacturing.

The Semiconductor Complex Limited (SCL) in India has already led to the development of indigenous semiconductor technology. In the late 1970s, India was heavily dependent on imported semiconductors for its burgeoning electronics industry. It was felt that indigenous technology was necessary to reduce this dependence and make India self-sufficient in the field of electronics. Hence, SCL was set up in Mohali with the help of technical collaboration from the Soviet Union. The laboratory initially focused on producing discrete components such as diodes and transistors. However, it soon expanded its capabilities to include the fabrication of integrated circuits.

The establishment of SCL led to the development of several indigenous semiconductor technologies. For instance, SCL developed a unique P-N junction process that was optimized for Indian environmental conditions such as temperature and humidity. This process was used to manufacture diodes and other components that were specifically designed to operate in harsh Indian conditions.

Going forward, investment in semiconductor laboratories will play a vital role in shaping the future of semiconductor industry in India. With increasing demand for electronic devices, it is imperative that the country invests in the development of semiconductor technologies. For Indian manufacturers to compete with global leaders, their semiconductor labs must be equipped with the latest tools, equipment, and research facilities. As investments in these laboratories increase, India will be able to develop its own semiconductor manufacturing ecosystem, which will boost the country's economy, create jobs and reduce reliance on imports.