India’s chip-making journey may start with ATMPs.

India may have to wait a long before cutting-edge chips like Intel, TSMC, and Samsung are produced in the country. For the time being, assembly, testing, marking, and packaging (ATMP) and speciality fabs are more likely to be the country’s first steps into the semiconductor industry.

According to industry experts, India’s massive mobile phone market has been highlighted as a forerunner of a booming semiconductor manufacturing base. Still, a lack of infrastructure and a lack of legacy in the company keeps top firms out.

Rajeev Khushu, head of the India Electronics and Semiconductor Association, said, “We advised (to the government) that we focus on the 28nm technology node” (IESA). He believes that going with semiconductor ATMP firms, which generate more jobs and require less investment than full-fledged fabs, is the “correct initial step” for the country.

IESA also recommended the government begin with speciality fabs, which are essential in industries like power, electric vehicles, and medical devices, according to Khushu. He explained, “The upside with those speciality fabs is that it’s still a new product, so you’re not far behind and can catch up.”

According to Ajay Prakash Sawhney, secretary of electronics and information technology, the government has received interest from global companies. It will come out with “concrete programmes” for semiconductor manufacture in India in six months.

Tata and Vedanta are apparently in talks to enter the space, albeit Vedanta may build a display fabrication unit rather than a semiconductor one. According to the CEO described above, “big names” in India have begun recruiting people for semiconductor ATMP.

Experts claim that the world’s largest semiconductor companies, on the other hand, are not considering India at all. “India has been trying for several years to bring chip makers into the country to lessen dependency on imports and establish trustworthy partners for crucial applications. “However, attracting global corporations to build up chip fabrication plants in India has always been and continues to be tough,” said Gaurav Gupta, Research Vice President at Gartner.

According to Gupta, companies want to make sure they have the necessary assistance because the capital investment is substantial. “The government may help (such efforts) by providing cash and subsidies, but infrastructure remains a major issue. Power, water, and the surrounding ecology of equipment players and materials are all required 24 hours a day, seven days a week, “he stated, “Companies are apprehensive about making such a large investment in India,” says one source “he stated.

According to Gupta, bleeding-edge processors, such as those produced by Intel, TSMC, Samsung, and others, require investments of $15-20 billion. Even other chips may necessitate $5-7 billion in assets. “While the government may be able to help to some level, the rest of the infrastructure is tough to set up. You’ll also need highly consistent policies, “he stated

TSMC and Samsung, for example, have advanced to 3nm technology nodes, leaving 28nm nodes far behind. The technology node relates to the chip’s design guidelines and manufacturing method in semiconductor manufacturing. 

“They’re attempting to disassemble the components so that they can be assembled here,” says the narrator “Parv Sharma, a research analyst at Counterpoint Research, echoed this sentiment. “There has to be a lot of investment in the space. It is a 15–20-year timeframe, not a 5- to 10-year term, “he stated. According to Sharma, the country can start with smaller components like battery cell packing and gradually expand.

According to Khushu, the IESA is also working on a report for the government that recommends that India try to become a raw material supplier to the global semiconductor sector. “Semiconductors aren’t only good to have anymore. It has taken on a more strategic tone. Many countries are attempting to exert control over the supply chain. He explained that they want to be self-sufficient in at least some sectors, such as defence.

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