New Delhi, Sept. 18 -- India's semiconductor ambition is entering a more consequential phase. The first stage of the country's push was understandably dominated by fabrication plants, packaging facilities, investment commitments and the difficult task of establishing a manufacturing ecosystem almost from scratch. Semicon 2.0 now widens that canvas. Its six pillars span design, machines and materials, fabrication, packaging, research and development, and talent. More importantly, the government is placing greater emphasis on Indian semiconductor intellectual property, chip design and home-grown fabless companies. That shift matters because manufacturing chips and owning the technology that defines them are two very different measures of technological strength. India may host factories and become an important link in global supply chains, but lasting semiconductor capability will depend on whether Indian companies can design chips, own valuable IP and build products that compete globally.
India does not begin this journey without advantages. The country already has a substantial semiconductor design talent base, built over decades as global chipmakers established engineering and research operations here. The challenge is converting that human capital into Indian intellectual property and commercially successful companies. The Design Linked Incentive programme offers an early foundation. By March, 24 chip-design projects had been approved, 103 fabless companies had received access to advanced design infrastructure, and seven chips had been fabricated from 16 designs taped out. The government has set a target of enabling at least 50 fabless semiconductor companies in the next phase. These numbers remain modest compared with the scale of the global industry, but they signal an important transition from providing engineering talent to creating technology that India itself owns.
The economic argument for this transition is compelling. Semiconductor design can account for up to half of the value addition in the chip value chain. A successful fabless company does not necessarily need to own an enormously expensive fabrication plant; it can concentrate on architecture, design and intellectual property while contracting manufacturing to specialised foundries. This creates an opening for India. Yet designing a prototype is only the beginning. Start-ups need patient capital, affordable access to electronic design automation tools, opportunities for repeated tape-outs, reliable fabrication partners and, crucially, customers willing to deploy Indian chips at scale. Government procurement in strategic areas such as defence, telecom, power, space and transport can provide an early market, but commercial competitiveness must remain the ultimate test.
Semiconductor sovereignty should therefore not be confused with semiconductor isolation. No country controls the entire value chain, and India will continue to depend on global technology, equipment, materials and markets. The objective should instead be to occupy increasingly valuable parts of that chain. Fabs remain essential, as do packaging and component manufacturing. But factories alone cannot deliver technological leadership if the most valuable designs and intellectual property continue to originate elsewhere. India has spent years proving that its engineers can design sophisticated chips for the world. The next challenge is harder and potentially more rewarding: enabling Indian companies to design them for themselves, own the technology and sell it to the world.
Published by HT Digital Content Services with permission from Millennium Post.