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India’s R&D Prowess Not Enough to Become ‘China+1’ in Chip Game

While proposals for installing fabs still await government approval, foreign R&D investment shines bright
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With a global emphasis on diversifying semiconductor supply chains and reducing reliance on a single country, the world turns its gaze towards India to lead the highly acclaimed ‘China plus one’ strategy. And efforts in that direction have been underway for a while now. 

The money poured into enabling a semiconductor ecosystem will help India in the long run. This would help create employment opportunities, reduce import dependency, and help India become a semiconductor export hub. 

While proposals for the installation of fabs received by the government (owing to the modified incentives scheme) still await approval, what has come as a shining light for India has been the foreign R&D investment over the years. 

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Raining investments 

Despite the grim reality of private sector R&D in India, the country has managed to be a significant location for global semiconductor design companies, as many have established research and development centres here due to the abundance of skilled semiconductor design engineers, who constitute 20% of the global total, and a high number of design patents and intellectual property rights registered in India. In fact, many of the world’s major semiconductor and Wafer Fabrication Equipment (WFE) manufacturers have established significant research and development operations in India.

American company Lam Research, which specialises in wafer fabrication equipment, recently installed its 2nd R&D facility in India, aiming to focus on hardware and software designs which will be incorporated into the next generation of DRAM, NAND, and logic devices. 


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Lam Research India’s Krishnan Shrinivasan told DQ India, “The availability of a technically sophisticated workforce contributes significantly to product design and testing.” Having a local presence will enable engineers here to carry out the entire design process, including testing and validation of new hardware and software, on-site, greatly reducing the time to complete the design cycle, as it eliminates the need to send the designs to other locations for these processes.

There is also the US-based Applied Materials, a leader in material engineering solutions, which pledged $50 million to set up an R&D facility in Bengaluru to support future product development and benefit the local supply chain. Likewise, Texas Instruments, which holds the largest market share for the analogue IC industry, has India as its largest R&D site outside its Dallas headquarters. 

Additionally, Micron Technology, the memory solutions provider, is continuously expanding its presence in India, growing to 3,500 employees in a little over three years. “The Micron India Research Center (MIRC) was built on the back of one of the fastest non-linear ramps in the Indian semiconductor industry. In three years, over 70% of Micron’s non-manufacturing operations have an India footprint, giving it a unique colocation advantage to execute cross-functional research programs. MIRC leverages this to build a research-oriented team for AI/ML, data sciences & analytics, engineering CAD and system-level solutions,” Anand Ramamoorthy, managing director of Micron India told AIM

NXP semiconductors also inaugurated its R&D labs in India recently to collaborate with startups and focus on new areas of intellectual property and system-on-chip technology.

Global Semiconductor R&D Expenditure

Indian private sector needs a push

Minister of State for Electronics and IT Rajeev Chandrasekhar, in a virtual address at IEEE MAPCON 2022, stated that the government is providing financial assistance for research and development efforts to help India transition from being a tech consumer and a provider of back-office support to becoming a major global tech producer.

However, the incentives provided by the government to private industries for R&D are not aplenty. Zoho CEO Sridhar Vembu tweeted, “For India to build such companies, the private sector must invest heavily in R&D. There is no other way. The government should incentivise and persuade companies to invest in R&D. Industrial R&D is not the same as academic research.”

Moreover, ahead of the Union Budget 2023-24, the Confederation of Indian Industry (CII) suggested that the Centre should bring private companies under the ambit of government funding in a ‘limited manner’ to help R&D in the country. It also proposed policy changes that would allow intellectual property to be used as collateral for bank loans. 

Last month, the government announced that it would soon launch ‘future labs’ at C-DAC to provide R&D capital for developing semiconductors and deep technology. Future Labs will encourage industry and academic collaboration and push for academic work that can directly contribute to large-scale manufacturing in industries. 

The road to being the ‘+1’ to China won’t be an easy one. AIM spoke to an official from C-DAC who said, “I think it [the question of whether India will benefit from China+1] depends on a number of factors, including the level of investment, the specific technologies and innovations that are developed, and the government’s ability to create a favourable business environment. However, it is certainly a step in the right direction and can be a major contributor to the growth of the country’s economy.” 

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Ayush Jain
Ayush is interested in knowing how technology shapes and defines our culture, and our understanding of the world. He believes in exploring reality at the intersections of technology and art, science, and politics.

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