India must attract more semiconductor companies to become a powerhouse: Ajit Manocha of SEMI

The president and CEO of SEMI outlines the growth prospects of India's semiconductor sector, and the importance of global collaborations, joint ventures, and a comprehensive ecosystem to achieve self-reliance

By Naandika Tripathi Forbes India Staff

Published: Mar 7, 2025 12:31:36 PM IST

Updated: Mar 7, 2025 12:51:04 PM IST

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Ajit Manocha, president and CEO of SEMI. Image: Naandika Tripathi

Three years after its launch, the India Semiconductor Mission (ISM) is showing promising results, with chip-manufacturing plants set to go live soon. The initial Rs 76,000 crore funding for ISM 1.0 is nearly depleted, and the government is looking at the next phase—ISM 2.0. As India takes its next big step in the semiconductor sector, the focus will have to shift from planning to execution.

On the sidelines of the Gujarat SemiConnect Conference-2025 in Gandhinagar, Forbes India caught up with Ajit Manocha, president and CEO of SEMI, the global industry association serving the semiconductor and electronics manufacturing and design supply chain. Manocha talked about the next steps for the sunrise sector, countries with the strongest semiconductor ecosystems, the implications of geopolitical changes, and more. Edited excerpts:

Q. What are the key areas India needs to focus on to achieve success in the semiconductor sector?

India is off to a good start, but the next step is crucial: Flawless execution. We must deliver each project correctly, every time, without setbacks or failures. The consequences of failure would be costly, not just for individual units, but also for India's global image. To achieve this, we must focus on two key areas: a) deliver projects on time, with precision, and without errors; and b) set world-class KPIs [key performance indicators] and strive for excellence.

Don’t settle for average results, and aim to be the leader. For existing units, these two areas are critical. However, India must also attract more companies, including ecosystem companies and manufacturing units, to become a powerhouse. It is encouraging to see that the second phase of India's semiconductor mission is going to be launched soon. ISM 2.0 will focus on more member companies and ecosystem companies. Once announced, we must execute ISM 2.0 effectively, leading to multiple units in India by 2030.

Also Read: Tata Group aims to make Gujarat's Dholera the global epicentre of semiconductor excellence: Tata Electronics CEO Randhir Thakur

Q. Which countries have the strongest semiconductor ecosystems and manufacturing hubs?

Currently, the strongest semiconductor ecosystems and manufacturing hubs are in South Korea, Japan, Taiwan, and the US, with some European countries and Southeast Asia also having a notable presence. However, no single country has a complete ecosystem, as the entire value chain requires multiple countries’ expertise. For instance, in ultra-high purity materials, Japan leads, followed by the US and Europe. In front-end manufacturing, Taiwan excels in leading-edge and bleeding-edge technologies, while China is strong in leading-edge and legacy. The US has less advanced capabilities, and Japan is now re-entering the bleeding-edge space. India can learn from the semiconductor industry by leveraging global platforms and collaborations. By engaging with established companies from various countries, India can create similar capabilities domestically. The semiconductor industry offers a global network of companies that can provide opportunities for India to develop its own ecosystem.

Q. What strategies can India adopt to boost its semiconductor sector?

To boost India's semiconductor sector, we need to attract more value chain manufacturing units and ecosystem companies. This could involve joint ventures (JVs) for compound semiconductor manufacturing (e.g., silicon carbide); assembly and testing; wafer fabs and memory fabs.

We should focus on areas with reasonable to low barriers to entry. While setting up an advanced fab is challenging, we don't need to focus solely on the most advanced nodes. The industry's future relies on a range of nodes, including legacy and trailing edge nodes, which will remain essential for device manufacturing. Rather than targeting the most advanced technologies, we should prioritise building a comprehensive ecosystem that addresses various industry needs.

Also Read: Keeping focus on Make in India and sunrise manufacturing sectors like semiconductors crucial for new coalition government

Q. How are geopolitical tensions affecting the semiconductor industry?

The current geopolitical tensions are creating significant uncertainties and risks, particularly in terms of supply chain disruptions. The war in Ukraine, for example, has impacted the delivery of rare earths and critical minerals. Climate-related issues, such as unpredictable natural disasters, are also affecting supply chains. The globalisation process is at risk due to these geopolitical challenges. The semiconductor industry, with its globalised supply chain, is particularly vulnerable. While some countries are exploring regionalisation or localisation, this shift is unlikely to happen soon. The growth of the chip sector in various regions will likely be a long-term process, taking 10 to 20 years. This complexity highlights the need for industries to adapt to the evolving global landscape.