As Semicon India 2024 approaches, the Indian semiconductor industry is at a critical juncture.
With the initial allocation of the US$10 billion incentive under the India Semiconductor Mission (ISM) nearing full commitment, industry leaders are keenly anticipating what the future holds. From potential new allocations to the need for more robust policies to nurture the ecosystem, experts are offering insights on what to expect from this year's event.
The need for continued government investment
Satya Gupta, President of the VLSI Society of India, pointed out some concerns about the future of funding for India's semiconductor industry. He suggests that an additional US$10 to US$15 billion may be required to maintain the momentum in developing the nation's semiconductor capabilities.
"For the semiconductor ecosystem to flourish, we need substantial and continuous investment," Gupta stressed. This perspective is shared by Sanjeev Keskar, CEO of Arvind Consultancy, who noted that the initial US$10 billion budget has already been largely committed to a few major projects, including the Tata Fab and Micron ATMP.
With only around US$2 billion left unallocated, the industry is eagerly anticipating new government funding announcements. These could be crucial for advancing India's ambitions in semiconductor manufacturing. "Understanding ISM's future plans is critical for the industry's next steps," Keskar added.
Fostering a robust fabless ecosystem
Another focal point of the upcoming event is expected to be the development of a fabless ecosystem in India. Despite the government's Design Linked Incentive (DLI) scheme, progress has been slow, with less than 15 proposals approved over two and a half years.
Keskar is optimistic that this year will see a "major push" towards creating a vibrant fabless ecosystem, especially with large companies like L&T Semiconductor stepping into the fab space—a significant shift from the domain being dominated by startups.
Gupta added that the industry's investment in product ecosystems has been suboptimal. He suggests a reallocation strategy where 20% of manufacturing funds are diverted to product development.
"If the next tranche of ISM is US$10 billion, then US$2 billion should be earmarked for products. Ultimately, it's the products that will make the ecosystem successful, not just manufacturing," he said.
Talent development and the role of the diaspora
The challenge of talent development is another crucial topic expected to be addressed at Semicon India 2024.
While the domestic talent pool is still maturing, Keskar and Gupta see the return of experienced Indian professionals from abroad as vital to building a competitive workforce. Gupta pointed out that 80% of the workforce required for new fabs will need to be experienced professionals, not fresh graduates.
To this end, Gupta advocates for government incentives aimed at attracting semiconductor professionals from Southeast Asia and the US back to India.
"The government needs to create a separate pool of funds, possibly around US$500 million, dedicated to repatriation incentives," Gupta suggested, drawing parallels to Taiwan's successful strategy in the early days of TSMC.
Advancing academia-industry collaboration
Finally, experts stress the importance of strengthening academia-industry collaboration, particularly in VLSI education.
Gupta proposed that every graduating VLSI student should be able to perform a tape-out, a critical process in chip design, before entering the industry. To facilitate this, he recommends that the government support at least 200 tape-outs annually, with subsidies covering 50% of the cost for projects using advanced nodes.
As the industry gathers in Greater Noida for Semicon India 2024, the focus will be on how the government and industry can work together to address these critical issues. With expectations high, the event promises to be a pivotal moment for India's semiconductor ambitions, setting the stage for future growth and global competitiveness.
