Opportunities and Risks for India in the Changing Semiconductor Geopolitical Landscape

Source: Dev.to

India’s Semiconductor Development – A Strategic Overview

India is in a decisive phase of its semiconductor development journey. Global chip supply chains are being restructured due to export controls, national‑security considerations, and the concentration of manufacturing in a few East‑Asian economies. These shifts create meaningful opportunities for India while also exposing structural risks that must be assessed carefully. This analysis presents a precise, source‑verified view of India’s semiconductor position, tailored for engineers, strategists, and policymakers.

1. Concentration Risk & Diversification

Source: Semiconductor Industry Association (SIA), CSIS, 2022

The concentration of semiconductor manufacturing in a handful of East‑Asian economies has accelerated diversification efforts by governments and industry leaders seeking risk‑reduced locations. India benefits from this shift as a large, politically aligned, and demographically stable market that can support the expansion of advanced packaging, assembly, and selective manufacturing【2】.

1.1 Strategic Technology Partnerships

These partnerships provide India with access to:

• Training programs
• Design and verification tools
• Process expertise
• Long‑term collaboration with established semiconductor leaders

2. Demand Growth & Ecosystem Strength

2.1 Demand Growth in Electronics & Mobility

Figure 2 – India’s Semiconductor Market Growth Projection (2023‑2030)
Source: Government data (2023) – [6]

[Image: Figure 2 – Projected market growth 2023‑2030]

Figure 3 – Industry‑Sourced Projection (CAGR 23.1 %)
Source: PIB market outlook

[Image: Figure 3 – CAGR 23.1 % projection]

The figures illustrate a sharp rise in demand toward 2030, reinforcing the scale of downstream opportunities that will drive domestic chip requirements across networking, consumer electronics, automotive systems, and power applications.

2.2 Strong Design & Verification Ecosystem

Government initiatives such as the Chip‑to‑Startup programme aim to further strengthen this base by training new VLSI, verification, and R&D specialists.

2.3 Government Programmes & Industrial Investments

Multiple semiconductor units have recently been approved across states, demonstrating India’s intent to build a complete end‑to‑end semiconductor ecosystem.

3. Supply‑Chain Position & Workforce Capability

3.1 Trusted Location for Diversified Supply Chains

India’s participation in strategic technology partnerships has enhanced confidence among international stakeholders evaluating alternative supply‑chain nodes. An improving regulatory and investment environment positions the country as a credible component of global semiconductor‑resilience strategies.

3.2 Strong Potential in ATMP & OSAT

Advanced Test‑and‑Measurement (ATMP) and Outsourced Semiconductor Assembly & Test (OSAT) facilities provide an important intermediate step toward broader manufacturing ambitions. As global companies prioritize distributed packaging to reduce single‑point vulnerabilities, India’s growing ATMP capacity positions it as a reliable location for high‑value, labour‑intensive, precision‑driven functions.

3.3 Expanding Workforce Capability

Figure 4 – India’s STEM Talent Pipeline Compared Globally
Source: Nasscom/IBEF

[Image: Figure 4 – STEM talent pipeline]

The figure highlights India’s unmatched STEM talent pipeline, validating the country’s capacity to supply engineers and technicians at scale. Skill programmes linked to national semiconductor initiatives align curricula with industry needs, reducing the lag between workforce preparation and operational readiness.

3.4 Demand Alignment with Domestic Manufacturing

Local production of chips and advanced packaging can reduce import dependence and improve delivery timelines for high‑growth sectors. For international companies, the combination of strong market potential and expanding production capacity makes India a compelling node in distributed manufacturing and supply‑chain strategies.

4. Challenges & Risks

4.1 High Capital Requirements

Advanced‑node fabs demand massive investment. Strong international partnerships and carefully designed incentive structures are essential for attracting global players. Delays in equipment access, utilities, or supply‑chain integration can extend payback periods and heighten financial risk.

4.2 Technology‑Access Challenges

Access to cutting‑edge process technology remains limited, requiring collaborative R&D and licensing arrangements.

4.3 Heavy Dependence on Imports

Figure 5 – Projected Demand vs. Domestic Supply (2023‑2030)

[Image: Figure 5 – Demand‑Supply gap]

The figure shows that while semiconductor demand is expected to rise sharply toward 2030, domestic supply potential expands only marginally, widening the import‑dependence gap and underscoring the strategic urgency of national programmes.

4.4 Infrastructure Readiness

4.5 Workforce Shortages in Fabrication

4.6 Geopolitical Complexity

References

1. Semiconductor Industry Association (SIA) & CSIS, Global Semiconductor Supply Chain Outlook, 2022.
2. [Citation for strategic partnership benefits] – source details to be inserted.
3. Government of India, Chip‑to‑Startup Programme documentation, 2023.
4. PIB (Press Information Bureau), India Semiconductor Market Outlook, 2023.
5. Nasscom/IBEF, STEM Talent Pipeline Report, 2023.
6. Government‑reported market growth data, 2023.

(All figures are placeholders; replace “#” with actual image URLs or embed the graphics as needed.)

5.1 Distributed Design and Verification

5.2 Secondary Manufacturing and Packaging Site

Figure 6 – ATMP and OSAT roles within the semiconductor supply chain
Illustrating how India can support secondary manufacturing, testing and advanced‑packaging operations.
Source: Einnosys (2024)

As global supply chains diversify away from over‑concentrated fabrication hubs, India offers a location where advanced packaging, assembly and testing can be integrated into a broader risk‑mitigation strategy. For engineering and operations teams, this creates an opportunity to:

• Establish parallel product lines.
• Introduce redundancy in assembly flows.
• Position India as a complementary site for mid‑stream manufacturing.

5.3 Alignment of Technology and Policy

India’s semiconductor progress is underpinned by:

• Rising domestic demand.
• A large, technically skilled design workforce.
• Targeted national programmes.
• Expanding international partnerships.

At the same time, significant challenges remain in:

• Infrastructure readiness.
• Front‑end fabrication capability.
• Access to advanced tooling.
• Management of geopolitical complexities.

India is increasingly positioned to become a reliable and valuable component of the global semiconductor supply chain through its strengths in design, verification, and advanced packaging. Organisations that incorporate India into their long‑term design, verification, and supply‑chain strategies will be better placed to enhance resilience and competitiveness as global semiconductor realignments evolve.

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