Governments have largely controlled semiconductor initiatives, allowing multinational corporations (MNCs) to participate mainly in manufacturing. However, with design and ecosystem development, the focus has been on Indian companies and startups. Industry leaders argue that MNCs must also be included in these areas to ensure a more integrated and globally competitive semiconductor ecosystem.

India is building the physical and digital infrastructures, driving the country’s intent to have the semiconductor and electronics ecosystem not just as a consumer, but as a global contributor, said Navin Bishnoi, AVP Central Engineering and India Country Manager, Marvell India.

While the industry began in India four decades ago, it has built a design powerhouse, with engineering and innovation efforts. “We realized we needed to move beyond design into manufacturing, testing, and productization to make a business out of it.”

Bishnoi continued that now, government incentives are primarily driven toward manufacturing because India was missing that piece.

“Much of the energy and dollars are being pushed there, which makes sense. But there are other places we need to focus on. Currently, most MNCs get to play only in manufacturing while other parts of the ecosystem, like design, are reserved for Indian companies or startups. We have been saying MNCs need to be involved so we can become a key part of this ecosystem.”

He stated that global companies in India are actively integrating into the country’s ecosystem and contributing to growth. They are not only developing products for both the international and Indian markets but also manufacturing locally to position India as a hub for intellectual property (IP) and design innovation.

“A scheme extended to have MNCs participate would significantly enhance the current situation. We can partner with startups, and upcoming ecosystem players to fuel those ideas and product development,” Bishnoi said.

Srikanth Settikere, the Vice President & Managing Director of India Development Center, Microchip India, said that production-linked incentives (PLIs) and state-based incentives have been highly encouraging, with a comprehensive list of incentives for companies investing in India.

“I’m happy to see India is discussing manufacturing, which is a complex word, especially in the semiconductor domain. To start, India must understand the nuances of getting full-fledged into the manufacturing domain. The first step we have taken is to incentivize people to set up their overseas plants here. Offshore assembly and test unit (OSAT) is going on, with many Indian players investing and potentially setting up OSATs here.”

However, he shared that the challenge lies in securing the incentives, typically spread over two to four years. “That needs to be minimized. The qualification process needs to be more seamless to prevent waiting for longer.”

The government can help by fostering an environment for markets to grow, and promote locally-made products, noted Dr. Rajeev Kumar Srivastava Director, Platform Architect Design Enablement - CTO & Bangalore Site Head of NXP Semiconductors.

“Within the ecosystem, we must work on the foundry and packaging, which will take time. However, we are in good shape as a design house. Even without a foundry, we can expand the design houses in India, which is a positive thing. It is important to understand that nobody can be self-dependent; we cannot have everything in India. Having a foundry is not an easy job because it takes 5-10 years to have a mature process that can produce chips. We started late, but it will happen. The most important thing is to ensure we are consuming what we produce.”

He noted that despite India’s large market, it continues importing products from China and other countries, often overlooking locally made goods. However, he cautioned against adopting a closed system, arguing that relying solely on domestic consumption is not beneficial. Instead, India should focus on selling globally.

“The government can think of expanding the internal market to reduce small businessmen from going to China, buying there to sell here. We must create a real practical environment by offering incentives or ensuring products are cheaper so we can compete with other countries.”

Published on February 11, 2025