India’s Semiconductor Industry Thrives with Micron, States, and New Policy, Despite PM Modi’s Concerns about Delay

However, despite the delay, the announcement of Micron’s assembly, test, marking and packaging (ATMP) project is seen as pivotal, with Indian Electronics and Semiconductor Society (IESA) president Sanjay Gupta calling it a “watershed moment”.

It is expected that this announcement will mark a turning point that will herald positive and upward growth for the Indian industry from now on, with more projects and plans in the pipeline.

Industry insiders acknowledge that semiconductor-specific policies implemented in states like Gujarat and Odisha play a key role, not only in attracting investment, but also in creating opportunities for states to increase their competitive edge. These policies contribute to the creation of an enabling environment in which states compete to provide superior and distinctive incentives. Targeted initiatives in the states can foster the growth of a skilled workforce and complementary ecosystems, making them attractive investment hubs.

In addition, states can flexibly adapt their policies to attract specific industry segments, such as chip manufacturing, design or testing, taking advantage of their inherent strengths and available resources. This tailored approach allows countries to adapt their strategies to the specifics of the semiconductor industry, further increasing their attractiveness to potential investors.

In Gujarat’s Sanand, Micron’s ATMP plant is taking shape, but the Odisha government announced late last year that the government had signed agreements with three parties to set up a semiconductor manufacturing ecosystem. Memorandums of Understanding were signed with IESA, Synopsys and the Electronics and Computer Software Export Promotion Council (ESC).

Following in the footsteps of Gujarat and Odisha, UP is now gearing up to introduce a semiconductor policy in the state. Chief Minister Yogi Adityanath has directed officials to review the policies of other states and collaborate with industry experts and stakeholders. The goal is to create a comprehensive semiconductor policy that pushes UP towards a visible node.

Meanwhile, in the southern part of the country, Tata is expected to set up an ATMP plant in the Kolar district of Karnataka, with plans to invest Rs 200 crore in this unit. During the winter session, Rajeev Chandrasekhar, MoS for Electronics and IT, said that Foxconn has submitted its application under the Modified Development Program for Semiconductor and Display Manufacturing to set up a semiconductor plant under consideration.

Similarly, there are positive discussions about revamping the Semi-Conductor Laboratory (SCL) in Mohali, and the Ministry of Electronics and IT is leading this effort as India seeks to improve its semiconductor manufacturing capacity.

Industry insiders believe that upgrading the infrastructure to match commercial plants would benefit the country and the industry immensely. This would also streamline the local supply chain, enabling faster operations from design to manufacturing and cutting costs for companies. Local availability of chips would also reduce import costs and increase competitiveness in the Indian ecosystem compared to global counterparts.

According to the chairman of IESA, in addition to MeitY, the Ministry of Foreign Affairs works actively to promote semiconductor partnerships worldwide. MEA-led initiatives such as the US-India Initiative on Critical and Emerging Technologies (iCET), where semiconductors play a significant role. Such joint efforts are key to advancing India’s knowledge and progress in this field.

In terms of international partnerships, last year the government approved a memorandum of cooperation between India and Japan on a supply chain partnership for semiconductors between Japan and India.

But there are also doubts about India’s ability to compete with giants like Taiwan. In this matter, the chairman of IESA emphasizes that blindly imitating the paths of other countries should be avoided. Instead, India should pursue strategies that are in line with its current needs.

Focusing on mature nodes is recommended as most of the demand is in this area. Despite the allure of 2nm or 5nm chip technologies, it is clear that there is significantly less demand for these advanced nodes, which begs the question why India should jump into them immediately.

Likewise, discussions continue about India’s reluctance to enter the prime area of waffle manufacturing. In that case, industry insiders emphasized that if it were easy to set up discs, many countries would have already done so. They now believe that as the ATMP projects begin to take shape, the fabs will follow when the country is fully prepared.