India aims to grow its semiconductor sector by focusing on assembly and testing, but heavy reliance on imported equipment remains a key challenge. Success depends on building a skilled workforce to support facilities like Micron's Sanand plant.
India is working to build a strong semiconductor manufacturing base, but the journey faces significant practical hurdles. A recent analysis by Equirus Securities points out that while the government's strategy is well-structured, the country is still heavily dependent on foreign equipment. In fact, over 90% of the machinery and tools required for these high-tech facilities must be imported, which creates a major reliance on global supply chains.
Strategic Focus on Assembly and Mature Technology
The country’s approach is to focus on Outsourced Semiconductor Assembly and Test (OSAT) services and mature manufacturing nodes ranging from 28nm to 110nm. This is a practical step, as these segments currently handle a large portion of global demand for automotive, industrial, and consumer electronics. By targeting these areas, India hopes to replace expensive imports with domestic production, aiming for a market where domestic chip consumption is projected to top $155 billion by 2031.
Workforce Needs and Training Targets
While India is home to a vast pool of roughly three lakh chip designers, there is a clear shortage of specialized manufacturing talent. The industry requires process engineers, yield engineers, metrology specialists, and technicians who are comfortable working in sterile cleanroom environments. To bridge this gap, the country is working toward an ambitious goal of training 85,000 industry-ready engineers by 2027. The progress at Micron’s facility in Sanand, Gujarat, is currently being watched as a key benchmark for how well the nation can scale this workforce.
Learning from Global Models
India’s current policy framework draws from successful models in other Asian countries. It incorporates elements like government-supported research and development from Taiwan, the focus on foreign direct investment seen in Malaysia, and the capital discipline practiced in Singapore. However, the ultimate success of these plans depends on how quickly the local supply chain can mature. Beyond equipment, the sector also needs a steady supply of specialty chemicals and gases, most of which are currently sourced from abroad. For investors, the long-term potential of the sector is tied to how effectively companies can execute these projects, manage the transition from design to full-scale manufacturing, and gradually reduce the cost of imports through local capacity building.