India’s push to secure place in global chip supply has ‘secret weapon’: its people

India is investing heavily in domestic semiconductor manufacturing to reduce imports and bolster its domestic industry. However, experts suggest that the country should leverage its most valuable asset – its talented workforce – to truly achieve its semiconductor ambitions. The New Delhi government has launched the second phase of its semiconductor mission with a budget of US$13 billion, focusing on building an industrial ecosystem that extends from chip design to manufacturing.

While the first phase emphasized foundational industrial setup, this new phase aims to strengthen the entire supply chain, including manpower development. This strategic move comes as other regional countries like Japan and Singapore are also ramping up semiconductor development following the Covid-19 pandemic-induced chip shortages.

Currently, India imports 90-95% of its semiconductors, leaving it vulnerable to global supply disruptions. To address this, the government has approved 12 semiconductor manufacturing projects across six states, with three companies – Micron, Keynes Semicon and CG Semi – already starting commercial production. A key project is Tata Electronics' partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation in Dholera, Gujarat, set to commence chip production in December, and a US$11 billion deal with Dutch chipmaker ASML for advanced chip manufacturing.

While India has lagged behind major semiconductor producers like the US, China and Taiwan, it holds a significant advantage in semiconductor design, boasting the world's largest pool of chip design engineers. However, the country lacks the necessary fabrication, assembly and testing capabilities. By investing in its human resources – creating a "Engineer in India" – and building a skilled workforce and supplier network alongside fab construction, India could significantly narrow the gap with global competitors.