Creating global intellectual property

The Union Cabinet’s approval of Semicon India 2.0, with an outlay of Rs 1.27 lakh crore marks an important evolution in India’s semiconductor journey. The first phase focused on attracting investments. Phase 2 strengthens semiconductor design, fabs, advanced packaging, R&D, talent, equipment, materials and supply chains.

This shift in emphasis is timely. India has begun building semiconductor manufacturing value chain capacity, including the commissioning of facilities such as the CG Semi OSAT plant in Gujarat. But the real challenge is ensuring these facilities remain globally competitive long after incentives taper off and creating an ecosystem where end-to-end chip development can happen from design to manufacturing and not just parts like testing or packaging. That will depend on India’s ability to create products, intellectual property (IP) and sustained domestic demand.

Thousands of Indian engineers work for companies such as Qualcomm, Marvell, AMD and Texas Instruments. India’s next transition is from engineering talent to ownership of products, platforms and intellectual property. Semicon India 2.0 policy recognises that India’s opportunity is not merely to replicate semiconductor ecosystems elsewhere but to become a trusted global partner across design, IP development, advanced packaging, AI infrastructure and manufacturing.

Moving Beyond Manufacturing

The first priority should be commercial semiconductor IP creation. Modern chips are built by combining multiple reusable IP blocks – processor cores, analogue circuits, accelerators, interface modules and memory controllers. Today, most of these building blocks are licensed from global suppliers. We need to develop far more of this foundational IP domestically.

Semicon India 2.0’s stronger focus on design and innovation can support startups, universities and incubators developing semiconductor IP. But creating IP is only the first step. India should build a repository of silicon-validated processor, analogue and accelerator IP, reducing reliance on expensive foreign licences and lowering barriers to chip design.

The second priority is applied research. India has the talent but lacks institutions that bridge research and commercialisation. Germany’s Fraunhofer Institutes and Taiwan’s ITRI demonstrate how industry-led research can be translated into market-ready technologies. India should build similar capabilities by aligning Semicon India 2.0 with the National Research Foundation and industry-led R&D.

The third priority is creating demand. Without sustained domestic demand, even world-class design and manufacturing capacity will struggle. The government can play a catalyst by encouraging procurement of India-designed semiconductor solutions in strategic sectors. India’s AI ambitions can become a powerful demand engine for indigenous semiconductor innovation.

Semicon India 2.0’s focus on equipment, specialty chemicals, gases, materials, consumables and precision engineering is just as vital, since these often-overlooked segments drive major value addition. Strengthening these capabilities will open new opportunities for Indian MSMEs and deepen India’s integration into global semiconductor supply chains.

Talent development remains another cornerstone. A globally competitive semiconductor ecosystem requires sustained investment in specialised skills. With global spending on semiconductor manufacturing equipment expected to reach $230 billion by 2028, India has an opportunity to emerge not just as a manufacturing hub, but as a trusted technology partner.

Ultimately, the success of Semicon India 2.0 will be measured not by investments announced, but by whether India creates globally competitive IP, products and semiconductor companies that endure long after incentives expire.

The writer is chairperson IESA &VP and India country manager, Marvell Technology.

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.