Title page

Contents

KEY TAKEAWAYS 1

INTRODUCTION 3

WHY INDIA SHOULD SEEK TO DEEPEN ITS PRESENCE IN GLOBAL SEMICONDUCTOR VALUE CHAINS 3

INDIA'S SEMICONDUCTOR MOMENT 7

Rapidly Expanding Market Size 7

Reorganization of Global High-Tech Value Chains 9

THE SEMICONDUCTOR VALUE CHAIN 13

INDIA'S SEMICONDUCTOR STATE OF PLAY AND MARKET OPPORTUNITIES 15

Semiconductor R&D and Design 15

Semiconductor Assembly, Test, and Packaging 18

Semiconductor Fabrication 19

Semiconductor Equipment 20

SEMICONDUCTOR AND ELECTRONICS MANUFACTURING POLICY ENVIRONMENT 20

REGULATORY ENVIRONMENT 22

Lessons From Attracting Micron's Semiconductor ATP Investment 22

Evolution of India's Regulatory Environment 23

Taxation 25

Labor Policy 25

Tariffs and Import Policies 26

Customs and Trade Facilitation 27

BUSINESS ENVIRONMENT 27

Labor/Workforce 28

Logistics/Infrastructure 30

INDIA'S SEMICONDUCTOR SUPPLY CHAIN 31

Semiconductor Manufacturing Materials 31

Semiconductor Research Support Institutions 32

OPPORTUNITIES IN INDIA'S STATES 32

Gujarat 32

Karnataka 33

Odisha 33

Tamil Nadu 34

LESSONS LEARNED FROM LEADING U.S. SEMICONDUCTOR STATES 35

Arizona 35

New York 36

Texas 36

Summary Conclusions and Policy Recommendations From Leading U.S. States 37

INDIA-U.S. PARTNERSHIP IN SEMICONDUCTORS 38

CONCLUSION 39

ACKNOWLEDGEMENTS 40

ENDNOTES 41

Figure 1. India's semiconductor market, 2022 (actual) and 2030 forecast 7

Figure 2. FDI (inward flow), share of Asian total, 2013-2022 10

Figure 3. Manufacturing investment in India as share of total investment, 2005-2021 11

Figure 4. India's exports of intermediate goods to the world 12

Figure 5. India's total exports to the world 12

Figure 6. Facets of the semiconductor value chain 13

Figure 7. Value added by segments of the semiconductor production process, 2019 ($445 billion, total) 14

Figure 8. Key actors in India's semiconductor ecosystem 15

Figure 9. IDM ATP, OSAT, and all ATP country market share, by firm headquarters, 2019 18

Figure 10. India's scores on the Economist Intelligence Unit's BER Index (10 is highest) 28