India granted approval for four additional semiconductor production ventures

The Indian semiconductor sector is facing several challenges, such as the lack of advanced chip fabs and a complete supply chain, a shortage of skilled professionals in microelectronics and materials science, and infrastructure gaps like the need for ultra-pure water and steady power. However, the sector is also witnessing significant growth, thanks to proactive policy frameworks introduced by the Indian government and a young workforce specializing in technology.

The Union Cabinet of India has recently approved four semiconductor projects worth Rs 4,600 crore ($554 million). These approvals follow a series of projects announced in March by India, which aim to increase the country's semiconductor sector and achieve 'technological self-reliance' due to current reliance on imports for around 90% of its semiconductor chips.

One of the approved projects is by SiCSEM, which is establishing an integrated silicon carbide compound semiconductor facility in Bhubaneshwar, Odisha. This commercial compound fab will have the capacity to produce 60,000 wafers annually and package 96 million units.

Other approved projects include Continental Device India Private Limited, 3D Glass Solutions, and Advanced System in Package Technologies. The manufacturing units for these approved projects will be set up in Odisha, Punjab, and Andhra Pradesh.

Besides these, companies like Skyroot Aerospace and Pi Beam Aerospace have presented semiconductor manufacturing projects in Punjab and Andhra Pradesh, besides Continental Device India Private Limited.

The global semiconductor industry is expected to reach $1 trillion by 2030, and India's semiconductor demand is projected to surpass $110 billion by the same year. Surging demand for consumer electronics is another factor driving the growth of the semiconductor industry in India.

However, the high cost of building fabs makes private investment difficult in the Indian semiconductor sector. Infrastructure gaps, such as the need for ultra-pure water and steady power, pose hurdles in the semiconductor industry. Environmental concerns, due to the energy consumption and hazardous waste produced by chip manufacturing, are another challenge in the industry.

Despite these challenges, the growth potential of the Indian semiconductor sector is immense. Accelerated enterprise adoption of advanced chips is also contributing to the growth of the sector. With the right policy support and investment, India can become a significant player in the global semiconductor industry.