India's Semiconductor Ambition: A Focus on Chip Design

India is striving to become a major player in the global semiconductor industry, and its focus is shifting towards fostering indigenous chip design companies. This article delves into the strategies and initiatives that are driving this growth, particularly highlighting the role of the Design-Linked Incentive (DLI) scheme and the India Semiconductor Mission (ISM).

• India possesses a significant talent pool in semiconductor design, with approximately 20% of the global integrated circuit (IC) design talent.
• The government's DLI scheme is crucial for promoting product development, initially supporting startups, but now expanding to include large domestic companies.
• The scheme aims to increase the benefits for small and medium enterprises (MSMEs) and encourage diversity in the semiconductor ecosystem.

The Role of Large Indian Chip Design Companies

The article underscores the vital role large Indian chip design companies play in driving India's semiconductor ambitions. These companies possess strong research and development (R&D) capabilities and established systems, offering advantages over startups:

• Large companies can achieve better economies of scale, leading to cost-competitive chips.
• They have the capacity to partner with leading global technology players and research institutions, fostering innovation and development.
• Their participation can create industry-relevant academic collaborations, similar to those found in South Korea and the United States.

Government Initiatives and Support

The Indian government has taken significant steps to nurture the semiconductor industry. Key initiatives include:

• The DLI scheme, designed to encourage the development of indigenous product companies, aims to provide targeted support in the initial stages of development.
• The India Semiconductor Mission (ISM) is a comprehensive program to promote semiconductor manufacturing and design in India.
• The government is considering increasing fiscal outlays under the semiconductor incentive scheme 2.0, focusing on domestic companies and expanding the DLI scheme.

Strengthening the Semiconductor Ecosystem in India

The article highlights the importance of fostering a robust semiconductor ecosystem in India, encompassing both design and manufacturing:

• The emergence of fabrication facilities (fabs) in India provides a built-in market for design companies, driving demand and growth.
• The government is encouraging joint ventures between Indian and multinational players to bring in advanced technologies and global best practices.
• The participation of multinational companies (MNCs) is seen as a vital component, bringing capital investment, knowledge transfer, and specialized skill development.

Challenges and Opportunities

While India is making progress in its semiconductor ambitions, there are challenges and opportunities to consider:

• The development of unique intellectual property (IP) and product innovation is still in its early stages for India.
• It is essential to recognize the domain-specific nature of product competitiveness in the semiconductor industry.
• India needs to strike a balance between supporting domestic companies and leveraging international collaboration.

Future Prospects

The article concludes with a positive outlook for India's semiconductor industry. The government's commitment, the presence of skilled talent, and the increasing participation of large Indian chip design companies are all positive indicators for the future:

• The Indian semiconductor market is projected to grow at a significant rate, creating opportunities for domestic companies.
• The development of homegrown semiconductor product companies is crucial for India to achieve self-reliance in critical technologies.
• India's strategic initiatives and the growing ecosystem are positioning the country to become a major player in the global semiconductor value chain.