SYLLABUS

GS-3: Achievements of Indians in science & technology; indigenization of technology and developing new technology; Awareness in the fields of IT.

Context:  NITI Aayog has released India’s first comprehensive 10-year roadmap, " Future of India’s Semiconductor Industry”, aimed at building a USD 120–150 billion semiconductor value chain by 2035 and positioning India as an indispensable player in the global semiconductor ecosystem.

Key Highlights of the Roadmap

• Why India Must Act Now:

o Nearly 90–95% of India's semiconductor demand is met through imports. 

o Dependence on imported chips poses strategic risks to defence, aerospace and critical infrastructure systems. 

o India spent nearly USD 150 billion on semiconductor imports during FY17–FY25, resulting in significant foreign exchange outflows. 

o Domestic semiconductor production is essential for making future technologies such as 5G/6G devices more affordable and accessible. 

o Global supply-chain diversification and the China-plus-One strategy have created a narrow but critical window of opportunity for India to enter the semiconductor value chain.

• India's Semiconductor Opportunity:

o The global semiconductor market is expected to exceed USD 1.5 trillion by 2035. 

o India's semiconductor demand is projected to reach around USD 200 billion by 2035. 

o At present, nearly 90–95% of India's semiconductor demand is met through imports. 

o Global supply-chain realignments and the search for trusted manufacturing destinations provide India with a historic opportunity to strengthen its position in the value chain. 

• Vision 2035: Becoming Indispensable, Not Imitative

o India aims to capture 10–13% of the global semiconductor market by 2035. 

o The roadmap seeks to retain 55–70% of semiconductor value capture within India through local design, packaging, materials and manufacturing ecosystems. 

o The roadmap targets the creation of a USD 120–150 billion semiconductor value chain by 2035. 

o The strategy is based on three pillars: 

1. Strategic self-sufficiency. 

2. Ecosystem strength. 

3. Global indispensability. 

o The emphasis is on building leadership in areas where India possesses structural advantages rather than competing directly in every segment of the semiconductor industry. 

o India aims to achieve 15–25% chip self-sufficiency by 2030. 

o Self-sufficiency is expected to increase to 35–50% by 2035. 

• Leadership in Advanced Packaging and OSAT:

o India aims to emerge as one of the top three global destinations for advanced packaging and OSAT (Outsourced Semiconductor Assembly and Testing). 

o Focus areas include Chiplets, 2.5D and 3D integration, Fan-Out Wafer Level Packaging (FOWLP), Panel-Level Packaging (PLP) and System-in-Package (SiP) technologies. 

o Advanced packaging is identified as a major opportunity in the emerging "More-than-Moore" era. 

• Focus on Compound and Wide-Bandgap Semiconductors:

o The roadmap prioritises leadership in Silicon Carbide (SiC) and Gallium Nitride (GaN) technologies. 

o India aims to become a major supplier of wide-bandgap semiconductor materials. 

o These technologies are critical for electric vehicles, renewable energy systems, power electronics, telecom infrastructure and defence applications. 

• Strengthening Semiconductor Design Capabilities:

o Tiered subsidies for Electronic Design Automation (EDA) tools are proposed to reduce design costs and improve access for startups and researchers. 

o An AI-enabled Semiconductor Engineering Mission is proposed to shorten chip-design cycles through agentic AI tools and automation.

o The roadmap targets the creation of more than 100 advanced semiconductor design IPs by 2035. 

o Priority areas include AI-native chip design, high-performance computing, quantum computing, system architecture and chiplet-based design. 

o The objective is to move from a design-services hub to a creator of globally competitive semiconductor IP. 

• Building Domestic Manufacturing Capacity:

o Wafer fabrication efforts will primarily focus on mature logic nodes between 28 nm and 65 nm. 

o Special emphasis is placed on analog, mixed-signal and power-management chips used in automotive, IoT and industrial applications. 

o The roadmap recommends exploring Small Modular Reactors (SMRs) to provide reliable dedicated power for semiconductor fabrication clusters.

• Alignment with India Semiconductor Mission (ISM) 2.0:

o The roadmap complements the objectives of India Semiconductor Mission (ISM) 2.0 announced in Union Budget 2026. 

o It marks India's transition from ecosystem creation to ecosystem deepening. 

o Greater emphasis is placed on design, manufacturing, packaging, materials, talent development, research and innovation and global partnerships. 

• Major Challenges Identified:

o Rising technological complexity is making semiconductor design and manufacturing increasingly difficult. 

o India faces shortages of specialised talent required for fabrication, packaging and advanced research. 

o Semiconductor manufacturing requires high capital investments, energy resources and water availability. 

o Building trust and acceptance for India-made chips within global supply chains will require sustained efforts. 

o Long gestation periods and slow returns increase the financial risks associated with semiconductor investments. 

• Roadmap’s Key Solutions:

o Establish a National Frontier Semiconductor Research Programme to accelerate frontier semiconductor R&D. 

o Create a National Design and Packaging Co-Design Platform to strengthen indigenous design capabilities. 

o Develop a National Fab Academy to build a semiconductor-ready workforce. 

o Establish a National Semiconductor Capital Framework to mobilise long-term investments. 

o Build sovereign capabilities in semiconductor design, research and advanced packaging. 

o Develop a robust domestic manufacturing ecosystem focused on strategic and high-value segments. 

o Create a complete semiconductor talent pyramid from technicians to solution architects. 

o Mobilise long-term capital through government support and private-sector participation. 

o Strengthen trusted international partnerships to accelerate technology acquisition and ecosystem growth.

Sources :     
PIB 
The Hindu 
Niti 
Fortune India