India’s Semiconductor Industry Faces Supply Chain and Talent Challenges
India’s semiconductor industry, despite government support and a sizable engineering workforce, is grappling with two major roadblocks: an underdeveloped supply chain and a shortage of specialized manufacturing talent. These constraints are proving to be significant hurdles as India pushes to emerge as a competitive hub in the global semiconductor landscape.
A key challenge lies in the absence of critical raw materials necessary for chip production. The country currently lacks adequate domestic supply of high-purity gases, silicon wafers, specialty chemicals, and ultrapure water—elements that are non-negotiable for establishing efficient fabrication units. While regions like Gujarat’s Dahej possess potential for advanced chemical and gas production, existing operations must scale up to meet semiconductor-grade standards.
To address this, there is growing emphasis on indigenizing the entire supply chain ecosystem, including upstream industries like chemical and gas production, along with semiconductor-grade equipment manufacturing. These steps are crucial to reduce dependence on foreign imports and ensure uninterrupted production flow.
Skilled Talent Shortage in Semiconductor Manufacturing
India has established itself as a strong player in semiconductor design, with nearly 20% of the global workforce engaged in this area. However, the skills needed for fabrication, testing, and packaging—vital components of the manufacturing process—remain in short supply.
This talent gap is prompting urgent initiatives to reskill engineers and develop a workforce capable of handling end-to-end semiconductor production. Without these efforts, the country risks falling short of its ambitious goals to become a semiconductor manufacturing powerhouse.
Policy Push Needs Industry Execution
Government-led incentive programs are in place to attract global investment and fuel domestic manufacturing ambitions. Yet, industry experts stress that financial support must be coupled with long-term infrastructure planning, efficient logistics, and sustained workforce development.
India’s semiconductor sector stands at a critical juncture. Bridging the gap between policy and execution will determine whether the nation can realize its potential and compete effectively in the global chip supply chain. Success will depend on rapidly closing the loop on supply chain dependencies and cultivating a highly skilled technical workforce.
