Why Vikram 3201 marks a turning point in India’s quest for technological self-reliance

Notwithstanding the feud, the first “Made-in-India” chip marks a significant technological breakthrough, with Prime Minister Narendra Modi asserting that “the day is not far when India’s smallest chip will drive the biggest change in the world”.

Developed by the semiconductor laboratory of the Indian Space Research Organisation (ISRO), the Vikram Microprocessor stands as a symbol of India’s preparedness to transition from a global consumer of advanced technologies to a credible producer of the same. It bolsters the country’s national objective of Atmanirbhar Bharat by reducing dependence on foreign technologies.

India is making strides towards joining the global semiconductor chip revolution. Between 2023 and 2025, 10 projects of more than 1.6 lakh crore were approved in six states, signifying India’s entry into high-value semiconductor manufacturing.

In 2024, the global sales of semiconductors amounted to $630 billion, while India’s consumption stood at $52 billion, which is expected to cross $100 billion by 2030. However, India’s domestic manufacturing currently meets only about 10 per cent of its total requirement, with the remaining demands met by imports. It underscores the need for having a comprehensive strategy that focuses on long-term capacity development.

Semiconductors as building blocks of modern technologies 

Semiconductors are made of materials such as silicon and possess a degree of electrical conductivity between that of a conductor and an insulator. The electrical conductivity can be controlled and varied over a wide range by controlling temperature. This flexibility allows the semiconductors to perform specific functions, making them fundamental to the modern electronic devices. 

They are the basic building blocks in an array of technologies, from smartphones, laptops, computers, smart devices, to electric cars, systems of renewable energy and military equipment. They play a crucial part in communication, data centres, and global connectivity. Their ability to integrate complex functions within a single chip has made technologies like personalised healthcare, smart manufacturing and autonomous vehicles a reality. The constant effort to create faster and more efficient semiconductor devices has driven the growth of the global chip industry and opened new possibilities for technology.

However, the worldwide supply chain for semiconductors remains highly concentrated. While Japan and the Netherlands lead in semiconductor equipment manufacturing, countries like Taiwan, South Korea, and the US dominate chip fabrication – transforming raw materials into tiny chips.

The fragility of this supply system became increasingly clear during the COVID-19 pandemic, when global chip shortages disrupted production in a number of industries. Hence, semiconductors have become not only technological essentials but also strategic assets. 

Semiconductor mission for a robust tech ecosystem 

Recognising the significance of semiconductors in achieving technological self-reliance and economic growth, India launched the India Semiconductor Mission (ISM) in 2021 with a financial outlay of Rs 76,000 crore. The mission aimed to strengthen India’s strategic position in the global value chain. 

Launched under the Ministry of Electronics and Information Technology (MeitY), the ISM aligns with the vision of Atmanirbhar Bharat and seeks to position India as a reliable alternative in global Semiconductor production amid the ongoing US-China tensions and supply chain realignments. The ISM also aimed at building a robust ecosystem for semiconductor and display electronics and positioning India as a global hub for electronics manufacturing and design.

Under this mission, the government has also introduced schemes like the Modified Scheme for setting up of Semiconductor Fabs in India, the Modified Scheme for setting up of Display Fabs in India, etc. The Design Linked Incentive scheme offers financial grants and infrastructure support to domestic companies, start-ups and MSMEs who are engaged in semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), and IP Cores, over a period of five years. 

Protecting IP in India’s chip industry 

To promote competition and protect the intellectual property in the semiconductor sectors, the Semiconductor Integrated Circuits Layout-Design Act was enacted in 2000. This act facilitates the protection of intellectual property rights related to the layout-design of integrated circuits.

It also encourages creativity and innovation in chip design within the overall objective of preventing unauthorised copying or commercial exploitation of the work. The law provides for the registration of semiconductor designs, and also prevents any unauthorised reproduction and encourages research and innovation. 

Further, the Semicon-India conference is a flagship event that brings together government leaders, global manufacturers, researchers and investors. First held in 2022, it serves as a key platform to showcase India’s vision, and through this, India has strengthened international collaborations with countries like China, Japan and the US.

Some hurdles that India needs to overcome 

Despite its ambitious policies and vision for semiconductors, India has some hurdles to overcome. Foremost among these is the very nature of the semiconductor industry, which requires a huge capital investment and long gestation periods for execution of the plans. Also, its deep integration into the global supply chain is needed. The necessary industrial infrastructure in India for semiconductor manufacturing is also in its early stages and not yet fully equipped to support large-scale fabrication.

The other requirement for scaling up of semiconductor manufacturing is skilled manpower that is proficient in high-end micro-electronics, material sciences, etc. However, India still lacks sufficient targeted academic programmes and training, which has created a skill gap. The government has started focusing on training the manpower through programmes like Chip to Start, etc. but building deep technical expertise will take time. 

Yet another set of challenges includes slow policy execution, issues around regulatory approvals, and lack of adequate coordination among different stakeholders, which may deter investors. In addition, India faces competition from countries like Taiwan, South Korea, Japan, etc., which already have the necessary tech ecosystem and strong research institutions. The relatively small market for advanced chips makes India dependent on imported materials and technology. This, in turn, makes the ISM susceptible to geopolitical tensions and supply-chain disruptions. 

India’s semiconductor roadmap 

The unveiling of Vikram 3201 marks a significant moment in India’s quest for technological self-reliance. It demonstrates the growing capability of Indian research institutions and industries to innovate and enter the core domain of chip manufacturing. The trend reflects that India’s strategy of combining policy incentives, global collaboration, and skill development is beginning to pay off. 

However, this achievement needs to be viewed as the beginning of a journey rather than its culmination. India still has a long way to go, and it certainly has a number of stumbling blocks to overcome. For sustaining growth, constant long-term policy support, enhanced investment in research and development, and strong industry-academia partnerships are essential.

The development of advanced fabrication facilities would require not only fiscal incentives, but also a reliable power supply, efficient logistics, and regulatory stability. Simultaneous emphasis on research and development and the upskilling of manpower would further complement such efforts. If India can align its policy ambition with effective execution and sustained investment, it can emerge as a credible player in the global semiconductor value chain. 

Post read questions

What are the challenges faced by the semiconductor industry in India? Mention the salient features of the India Semiconductor Mission.

The Vikram 3201 Microprocessor bolsters India’s objective of Atmanirbhar Bharat by reducing dependence on foreign technologies. Evaluate. 

In what ways does the India Semiconductor Mission (ISM) seek to position the country as a reliable alternative in global Semiconductor production amid the ongoing US-China tensions and supply chain realignments?

Despite its ambitious policies and vision for semiconductors, what are the major hurdles that India must overcome to achieve technological self-reliance and position itself as a global player in chip manufacturing?

(Renuka is a Doctoral researcher at the Himachal Pradesh National University, Shimla.)

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