Indian semiconductor industry faces a critical skills gap: TeamLease

India is now transitioning from packaging and manufacturing to strengthening capabilities in semiconductor design and intellectual property (IP) development. The Indian semiconductor industry currently faces an estimated critical skills gap of 320,000 to 350,000 professionals in specialized areas, such as VLSI design, chip fabrication, advanced packaging, and ATMP processes. 

Sumit Kumar, Chief Strategy Officer, TeamLease Degree Apprenticeship, tells us more about tacking the semiconductor skills gap. Excerpts from an interview.

DQ: How crucial is hands-on training for building a skilled semiconductor workforce?

Sumit Kumar: India’s rapid emergence as a global semiconductor manufacturing hub, fueled by initiatives like Make in India and the Production-Linked Incentive (PLI) scheme, highlights the vital role of hands-on training in creating a skilled workforce for this high-tech sector.  

India is also gradually transitioning from focusing primarily on packaging and manufacturing to strengthening capabilities in semiconductor design and intellectual property development, essential for achieving self-reliance and adding value to the global supply chain. 

However, for immediate workforce needs, experiential learning models are critical. With over INR 1.5 trillion in investments and a projected market value of $100 billion in revenue by 2030, the semiconductor industry faces a critical skills gap of 320,000 to 350,000 professionals in specialized areas such as VLSI design, chip fabrication, advanced packaging, and ATMP processes. 

Roles like semiconductor process engineers, who optimize wafer fabrication, cleanroom technicians, who maintain contamination-free production environments, and lithography engineers, who specialize in intricate circuit printing, require advanced technical expertise that cannot be gained solely through theoretical education. 

Hands-on training through apprenticeships, managed training services, and work-integrated learning programs is essential to bridge this gap. These models integrate academic learning with practical experience, enabling professionals to acquire job-ready skills while staying aligned with evolving technologies like AI, IoT, and 5G. 

Apprenticeships are particularly impactful in preparing talent for critical roles in semiconductor packaging and manufacturing, while collaborations between industry and academia ensure training remains current and industry-focused. By prioritizing experiential learning, India is not only addressing its immediate talent shortages but also building a robust pipeline of skilled professionals capable of driving long-term growth and innovation in the global semiconductor supply chain.

DQ: What are the key skills that are currently in short supply, and how does this impact the sector’s growth?

Sumit Kumar: India's semiconductor industry is currently grappling with a significant shortage of skilled professionals in critical areas such as very-large scale integration or VLSI design, chip fabrication, advanced packaging, and R&D. 

The successful operation of semiconductor units necessitates advanced competencies in photolithography, and assembly, testing, marking, and packaging (ATMP) processes. The advent of emerging technologies like AI, IoT, and 5G has further intensified the demand for expertise in semiconductor design and wafer manufacturing. 

Despite the Indian government's substantial Rs 76,000-crore semiconductor incentive scheme, which includes projects like Tata Electronics' chip fabrication unit and collaborations with Taiwan's Powerchip Semiconductor Manufacturing Corp (PSMC), the prevailing skill gap poses a significant challenge to the sector's growth.

To address this, India is actively seeking collaborations with countries such as Singapore, the US, the EU, and Japan through various Memorandums of Understanding (MoUs) focusing on technology transfers, R&D collaboration, and workforce development. 

These partnerships aim to facilitate reskilling and upskilling initiatives, providing Indian talent with access to global best practices in semiconductor design, packaging, and manufacturing. 

Key skills in demand include proficiency in semiconductor materials, fabrication technologies, testing methodologies, and quality assurance processes. Additionally, expertise in emerging fields like quantum computing, machine learning algorithms for semiconductor applications, and sustainable manufacturing practices is essential to drive innovation and meet industry demands. 

By emphasizing skill enhancement in these critical areas and fostering global collaborations, India can cultivate a highly skilled workforce capable of propelling the semiconductor industry toward sustainable growth and global competitiveness.

DQ: How important are the emerging technologies like AI and ML in the semiconductor industry, and what skillsets are needed to integrate these into semiconductor processes?

Sumit Kumar: AI and ML are revolutionizing the semiconductor industry by transforming chip design, optimizing manufacturing processes, and enhancing quality control. AI-driven algorithms are enabling the creation of more efficient and powerful semiconductors, while ML techniques are facilitating predictive maintenance and defect detection, significantly reducing downtime and production costs. 

As India's semiconductor consumption is projected to grow from $22 billion in 2019 to $110 billion by 2030, with a goal of capturing 10% of global demand and investments exceeding INR 1.5 trillion, integrating AI and ML into semiconductor processes has become essential for maintaining global competitiveness. 

This integration demands a workforce skilled in AI algorithms tailored for semiconductor applications, data analytics for process optimization, and hardware-software co-design for AI-enabled chips. 

Furthermore, expertise in advanced manufacturing technologies like photolithography, automated defect detection systems, and emerging techniques such as smart/advanced chip dicing is critical to fully leverage the potential of AI and ML in semiconductor manufacturing. 

Simultaneously, India is transitioning from a primary focus on R&D to expanding its capabilities in VLSI design and large-scale manufacturing, a shift supported by government initiatives, including a proposed ₹40,000 crore scheme to incentivize component manufacturing. 

This transition has also led to a rising demand for roles in precision assembly, automated packaging, and smart/advanced chip dicing, reflecting the evolving needs of the industry. By developing these skill sets and building expertise in both AI-driven technologies and manufacturing advancements, India can meet the growing domestic demand, but also strengthening its position as a key player in the global semiconductor supply chain, aligning itself with cutting-edge technological advancements and driving innovation.

DQ: To reach the target of 1 million skilled employees by 2026, India will need to upskill 500,000 people annually. What specific programs or initiatives are in place to achieve this goal?

Sumit Kumar: The electronics industry in India faces a significant skills gap, characterized by a mismatch between workforce capabilities and the demands of high-tech domains such as AI, IoT, and Industry 4.0 technologies. 

This gap presents a dual challenge: a shortage of skilled workers, and a lack of specialized expertise critical for advanced roles in manufacturing, electronics design, and technical troubleshooting—areas vital for driving innovation and operational efficiency. 

Projections indicate that by FY 2027-28, the sector will create approximately 12 million jobs in direct and indirect roles, but still face a workforce shortfall of 8 million and a skills gap affecting an additional 10 million individuals. 

To address this, a multi-pronged approach is essential, focusing on upskilling, reskilling, apprenticeships, and work-integrated learning programs. Expanding the apprenticeship ecosystem, which is currently growing at a 55% CAGR and projected to reach 1 million apprentices, is key. 

Doubling this growth to 2 million apprentices, supported by business incentives and partnerships with training providers, will create a sustainable talent pipeline. Additionally, large-scale reskilling and upskilling initiatives targeting more than 50% of the existing workforce are necessary to equip professionals with the advanced skills required for evolving industry demands. 

A coordinated effort involving government, industry leaders, and educational institutions is crucial to implement these strategies and build a future-ready workforce aligned with the sector's technological advancements and growth trajectory.

DQ: With a projected 25% increase in investments in skilling and reskilling over the next 2-3 years, how do you foresee this affecting the semiconductor talent pipeline?

Sumit Kumar: We suggest going beyond the 50% target for reskilling and upskilling the existing workforce to effectively address the semiconductor industry’s expanding demands and fully leverage the projected 25% increase in investments in skilling over the next 2-3 years. 

Large-scale reskilling efforts must focus on equipping workers with advanced competencies in semiconductor design, chip fabrication, wafer processing, and advanced packaging, which are increasingly critical in the face of rapid advancements in AI, IoT, and 5G technologies. 

Apprenticeships and work-integrated learning programs play a pivotal role in this transformation by bridging the gap between academic knowledge and practical industry requirements. These models seamlessly integrate hands-on training with theoretical instruction, enabling workers to gain real-world experience in high-demand roles such as VLSI design and chip manufacturing. 

Furthermore, such programs can help build direct collaboration between industry leaders and educational institutions, ensuring training remains aligned with evolving technological needs. By exceeding current targets, combining apprenticeships with reskilling initiatives, and adopting a coordinated strategy involving government bodies, industry stakeholders, and academia, India can address the immediate workforce shortfall while building a sustainable talent pipeline

DQ: Beyond job creation, what other economic benefits do you expect from having a highly skilled semiconductor workforce?

Sumit Kumar: Building a highly skilled semiconductor workforce can position India as a global leader in the semiconductor value chain, driving economic transformation far beyond job creation. It can catalyze innovation in design, manufacturing, and advanced technologies, reducing dependency on imports while boosting high-value exports and improving trade balances. 

With the right investments in skilling and reskilling, India can lay the foundation for attracting substantial foreign direct investment, as global tech leaders seek regions equipped with advanced talent pipelines to support semiconductor manufacturing and R&D. 

This, in turn, can help strengthen the industries like electronics, telecommunications, and AI applications, creating a ripple effect of economic growth and diversification.

By scaling up apprenticeship programs and embedding sustainability into workforce development, India can build strategic partnerships with multinational corporations that prioritize environmentally responsible and forward-looking operations. 

A workforce adept in cutting-edge technologies like AI, IoT, and quantum computing can enable India to become a hub for innovation and technological leadership. These efforts can not only enhance India’s competitiveness on the global stage, but also build economic resilience, ensuring the country remains at the forefront of technological progress while driving inclusive and sustainable growth.