India Should Shift Semiconductor Focus From Capacity To Domestic Ecosystem, Says EY-IESA

New Delhi, Sep 21 (KNN) India’s next phase of semiconductor development should move beyond expanding chip manufacturing capacity, according to a report by EY-IESA (India Electronics and Semiconductor Association). 

They added that focus should be on building a domestic ecosystem where chips designed, produced and packaged in India are increasingly used in products manufactured within the country, 

The report said India’s semiconductor journey has entered a decisive phase, with public investments, anchor manufacturing projects, expanding design capabilities and the broader policy framework under Semicon India 2.0 laying the foundations for a domestic ecosystem, reported ANI.

USD 200 Bn Semiconductor Consumption Market

India is projected to become a semiconductor consumption market of around USD 200 billion by 2035. However, a significant portion of this demand is currently embedded in imported electronic systems, modules, kits and assembled products, limiting the value captured domestically.

The report said strengthening domestic system design, electronics product development and advanced manufacturing could help convert this demand into a driver of indigenous semiconductor production.

Key downstream sectors include consumer electronics, automotive, industrial automation, telecommunications, aerospace, defence, medical devices and artificial intelligence.

Design-Led Manufacturing, Advanced Packaging

The report identified three strategic strengths India can leverage: a globally competitive semiconductor design ecosystem, one of the world’s fastest-growing electronics markets and an increasingly attractive manufacturing base supported by a large talent pool.

It said India could build a distinct position in global semiconductor supply chains by combining these strengths to develop globally competitive products and platforms.

Rather than replicating traditional semiconductor-producing models, India could pursue a strategy centred on design-led manufacturing, advanced packaging, compound semiconductors, trusted supply chains and system-level innovation.

Downstream Demand Key To Value Addition

According to the report, creating domestic demand for locally designed and manufactured electronics could be as important as supporting supply-side investments in semiconductor fabrication.

As global semiconductor supply chains diversify to improve resilience, India could also emerge as a trusted partner in the global ecosystem.

The report said the coming decade therefore represents an opportunity not only to expand semiconductor manufacturing capacity but also to establish India as a significant centre for semiconductor innovation, product development and electronics manufacturing.

(KNN Bureau)