India's ambitious plan to become a global semiconductor manufacturing hub faces significant execution challenges related to infrastructure, talent, and specialised knowledge, according to a new report. The 'Demo Insights Report 2025' from Endiya Partners highlights the gaps that could slow the country's progress from a design powerhouse to a full-scale manufacturing player.
The report identifies severe infrastructure demands as a primary constraint. Semiconductor fabrication plants, or fabs, are exceptionally resource-intensive. A single fab requires approximately 169 megawatt-hours of energy annually and 8.9 million gallons of water per day, making reliable power and water supply non-negotiable yet potentially risky in the Indian context. Furthermore, high logistics costs, which consume about 14 per cent of the country's gross domestic product (GDP), add another layer of complexity.
Compounding the infrastructure challenge is an acute shortage of specialised manufacturing professionals. The report projects a deficit of 10,000 to 13,000 fabrication specialists needed by 2027. This talent gap threatens to stall the operationalisation of multi-billion dollar projects approved under the government's incentive schemes.
While India competes with established semiconductor hubs like Vietnam and Malaysia, the report argues that India's differentiation lies in its scale, growing domestic demand, and its vast pool of design talent. The country is home to roughly 150,000 semiconductor design engineers, accounting for about 20 per cent of the global design workforce.
To succeed, the report states that India must treat reliability as a formal contract, not an aspiration. It outlines several strategic priorities essential for building a globally competitive semiconductor ecosystem. The foremost priority is ensuring reliable infrastructure, specifically uninterrupted power, abundant water, and efficient logistics for semiconductor fabs and their supporting units.
Developing talent across the entire value chain, from design to manufacturing, is another critical pillar. This requires expanding specialised training programmes to build a pipeline of over 100,000 engineers skilled in process technology, packaging, and testing.
The report also emphasises the need to strengthen international partnerships with key semiconductor regions such as the United States, the European Union, Japan, and Taiwan. Such collaborations are vital for accelerating process learning and diversifying supply chains. Finally, it calls for a focus on scaling startups into product champions by bridging design innovation with application-specific markets in automotive, industrial automation, and defence.
The conclusion of the report underscores that the next five years are crucial for India to transition from policy and pilot projects to consistent execution and proven reliability in its semiconductor ambitions. |
