en.Wedoany.com Reported - India's semiconductor strategy is shifting its focus from manufacturing to chip design and intellectual property, a transition that industry experts believe will determine the country's long-term position in the global semiconductor value chain. Chip design contributes nearly 50% of the total value addition in the chip value chain, while the fabless business model accounts for 30% to 35% of global semiconductor industry revenue.
India is home to approximately 20% of the world's chip design talent, but these professionals primarily serve global semiconductor multinationals, with limited indigenous design capabilities. Apaar Bhatnagar, Associate Partner at KPMG India, noted that some venture capital or private equity-backed fabless companies are developing system-on-chips for both the Indian and global markets, but have yet to reach a scale that allows them to compete with global players. Chip design is expected to become a core pillar of the next phase of India's semiconductor strategy, known as ISM 2.0. Under India Semiconductor Mission 1.0 (ISM 1.0), 12 projects have been approved with a cumulative investment of approximately 1.65 trillion rupees. Under this initiative, design-linked incentive schemes have facilitated 16 tape-outs, 6 application-specific integrated circuits, 10 patents, the involvement of over 1,000 engineers, and a more than threefold increase in private investment. Satya Gupta, President of the VLSI Society, pointed out that India needs more design companies and robust investment; without corresponding investment in design firms, there will be no Indian products. Ashwini Vaishnaw, India's Minister of Electronics and Information Technology, recently stated that the government will strongly support Indian design companies, helping their innovations achieve manufacturing and scaling within India. According to the Press Trust of India, the Department of Expenditure under the Ministry of Finance has approved a budget proposal allocating 1.25 trillion rupees for ISM 2.0. Ashwath Rao, Senior Analyst at Counterpoint Research, believes that while India has made progress in chip design, the biggest gaps lie in commercialization and product ownership, with the ecosystem remaining service-oriented rather than product-driven. Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA) and SEMI India, emphasized that a strong in-house design capability is the fundamental basis for building a globally competitive ecosystem in India.
Supported by initiatives such as the Production Linked Incentive scheme, India's electronics system design and manufacturing sector has made progress in manufacturing and assembly capabilities. India's electronics production value grew from 1.9 trillion rupees in fiscal year 2015 to 11.3 trillion rupees in fiscal year 2025, while exports rose from 380 billion rupees to 3.27 trillion rupees. Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), stated that the next phase of growth must come from stronger investment in indigenous design, IP creation, and R&D. Gupta of the VLSI Society suggested that at least 20% of ISM 2.0 spending should be earmarked for electronic design companies. Industry stakeholders believe that India needs a multi-pronged approach to overcome structural challenges, including stronger government support for trusted Indian chip design companies, creating domestic demand for locally designed chips, reducing dependence on global foundries, and leveraging emerging technologies such as artificial intelligence to compress design timelines. Executives and analysts expect that by 2035, India's domestic industry should evolve into globally recognized product companies with proprietary architectures, software ecosystems, and revenue streams.
