A new, multidimensional approach for the Indian Semiconductor Industry in 2022

The world was still recovering from the effects of COVID-19 when new variants Delta and Omicron challenged economies and industries worldwide. Despite the impact of these variants have had on industries, India has displayed resilience in the face of the pandemic, exhibiting the fastest growth among major economies. IMF projects India’s GDP to grow by 9.5 per cent in 2021 and 8.5 per cent for 2022.

KPMG’s 2021 India CEO Outlook highlighted CEOs in India are prepared for a digitally driven and purpose-led recovery to strengthen their organisations. Along with digital resilience and agility, Indian CEOs are looking to develop a roadmap for recovery to ensure growth. They are also focusing on efforts to meet environmental, social and governance (ESG) goals. Changing times need strategies updated at multiple levels. The high-performance semiconductor industry will also have to mark out a strategy to incorporate ESG goals, along with the existing challenges it is facing. 

Envisioning innovation and growth for 2022

With the introduction of 5G, technology, segments such as AI and cloud computing are now expecting a fast and seamless integration in business and other user segments. The current environment is more tech-driven than before. There is also greater openness to integration among different market players, which in turn, are driving changes to the business landscape over time.

While the 2010s saw a digital revolution with greater Internet penetration and algorithm-driven applications, the coming decade could witness innovations in integrated smart solutions. From self-driven electric vehicles, smart homes and smart cities to intelligent systems for effective supply chains, the ideas are already in place and being tested globally. 

In such dynamic times, India is keeping pace by being open to innovation and experimentation. As one of the largest economies of the world, India is already a hotspot for technology-driven industries. The challenging part is while India is brimming with potential on all sides, the projected growth across various sectors will have to be achieved with ESG factors in mind. 

The promise of new horizons in digitalisation

The analog semiconductor industry has helped to expand the horizons of the digital world beyond the general tech sectors. It has powered digital innovations by offering high-performance microenvironments for manufacturers across various industries. The analog semiconductor industry, little talked about in the general media, is an essential provider for almost all major industries such as consumer electronics, automotive and healthcare. 

In the years to come, it would benefit from a smarter and more comprehensive approach, with the integration of hardware, software and system solutions. Market players must strive for greater agility and improved adaptability to market fluctuations. The focus must be brought to smarter innovation such as wireless Battery Management Systems (wBMS) due to their importance in defining the future of the electric vehicle industry in a digital-first ecosystem.

Trends, challenges and opportunities 

The semiconductor industry has had its ebb and flow. It finally got media attention when there was a chip shortage during the global lockdown caused due to the COVID-19 pandemic. This shortage highlighted how important the semiconductor industry is to other industries and thus, the global economy.

The need for creating a well-planned infrastructure for semiconductor fabrication facilities (fabs) came to be the major point of discussion. Unfortunately, despite a significant contribution to research and development in the field, India is yet to make a mark in semiconductor fabrication.

Semiconductor fabs have led to major developmental changes in other countries, including extensive employment generation and greater revenues. However, this comes with added challenges that are financial, material and even geopolitical in nature. 

The coming decade will be defined by both challenges and opportunities waiting for the industry. The availability of robust financial infrastructure and a detailed roadmap for semiconductor fabs in India is essential. As the Government of India has recently set aside INR 76,000 crores for the development of a semiconductors and display manufacturing ecosystem in the country, the future looks promising. 

The author of the article is Daryl Wan, Regional Sales Director, IAA (India, ASEAN, Australia and New Zealand) at Analog Devices