Taiwanese Chip Giant MediaTek Prepares For Big India Hiring Spree. Where Does India Stand in the All-Powering Chip Industry?

MediaTek, the Taiwanese chip design giant, has its eyes firmly set on India, ready to expand its workforce and tap into the country’s growing tech ecosystem.
When you think about semiconductors, they might not seem as flashy as the devices they power, but these tiny marvels are the lifeblood of modern technology. In fact, semiconductors are often called the “new oil” because, much like oil in the 20th century, they fuel the machinery of today’s digital age—from powering our smartphone to enabling the cars of tomorrow, semiconductors are indispensable

Why India For Media Tek?

India is not only a massive consumer of electronics; it’s also fast becoming a critical hub for technology innovation and manufacturing. MediaTek’s Finbarr Moynihan, Global VP for Corporate Marketing, sees immense opportunity in India, especially with the country rapidly transitioning from 4G to 5G. “It’s happening very quickly here,” Moynihan said, pointing to the growing demand for premium devices—a trend that bodes well for advanced chipmakers.

Already the leading chip supplier for smartphone makers in India, MediaTek has surpassed rivals like Qualcomm by offering chips that cater to both ends of the market spectrum—affordable and premium. Now, it aims to double down on India by boosting its R&D efforts and expanding its local engineering talent pool.

MediaTek’s Anku Jain, Managing Director for India, further outlined the unique edge that Indian engineers bring to the table. “India is one of those rare countries which has a combination of English-speaking skills and good engineering,” he remarked. With over 1,000 engineers currently working across its Bangalore, Noida, and Mumbai offices, the company already has a strong presence. However, these numbers are set to grow significantly, with Indian engineers playing a critical role in designing chips that power global tech platforms.

The Big Outlook

The semiconductor industry is the foundation of modern technology from enabling faster communication to smarter shopping experiences, semiconductors are driving innovation in every corner of our lives. And the industry is on an extraordinary growth trajectory. In 2021, global chip sales surged by 20%, reaching a staggering $600 billion and by 2029, this is projected to more than double, crossing $1.3 trillion.

Hence, with such staggering potential, nations worldwide are competing fiercely to attract semiconductor investments. India, too, has jumped into the fray, earlier this year, the Indian government announced plans to establish three semiconductor manufacturing facilities, signaling its ambitions in this critical sector.

The global semiconductor industry is projected to grow at a steady 6-8% annually, three key areas are driving this boom: automotive, data storage, and wireless connectivity. Together, these segments are expected to account for 70% of the industry’s future growth.

The Three Pillars of Semiconductor Demand

1. The Automotive Revolution
The automotive industry is shifting gears and fast becoming a semiconductor powerhouse. Innovations like electric mobility and autonomous driving are transforming the sector, and chips are at the heart of this transformation. Imagine cars with smarter infotainment systems, advanced safety features, and full self-driving capabilities—all made possible by cutting-edge chips.

Currently, the automotive industry accounts for around 8% of semiconductor demand, but by 2030, this is expected to climb to 13-15%. That’s a monumental leap, driven by a threefold rise in demand over the decade. In fact, the automotive segment alone could account for a whopping 20% of the industry’s growth in this period.

2. Computation and Data Storage
As we step into the era of AI and cloud computing, the need for advanced chips is skyrocketing. The computation and data storage segment is expected to grow at a steady 4-6% annually, fueled by surging demand for data centers, machine learning, and big data analytics. Think of the chips powering AI models or massive cloud infrastructures—they’re laying the groundwork for the digital future.

3. Mobile Telephony and Wireless Communication
The transition to 5G is no longer a distant dream; it’s happening now. With smartphones becoming more affordable, even in underdeveloped markets, the demand for semiconductors in mobile and wireless communication is climbing steadily. The 5G wave isn’t just about faster internet; it’s about creating smarter, more connected devices across the globe.

Where Does India Stand?

India is stepping up its game in the semiconductor space, a strategic move, considering the critical role semiconductors play in everything from automotive and aerospace to healthcare and defense.

Two recent developments are putting India on the semiconductor map –

1. The US-India Semiconductor Partnership

In a landmark move, the US Department of State has teamed up with India’s Semiconductor Mission, an initiative by the Union Electronics and IT Ministry. This partnership is about more than just collaboration—it’s a bid to make the global semiconductor supply chain more secure and diversified.

Backed by a $500 million investment under the CHIPS Act of 2022, this initiative focuses on boosting semiconductor research and manufacturing in both countries. It’s a win-win, India gets the infrastructure and expertise, while the US ensures supply chain resilience.

2. The Fifth Semiconductor Facility in India

At the same time, India is also ramping up its manufacturing capacity. The Union Cabinet recently approved the country’s fifth semiconductor plant in Sanand, Gujarat. This new facility will focus on assembly, testing, marking, and packaging (ATMP) of chips, with an investment of Rs 33.1 billion. Once operational, it will have the capacity to produce a staggering 6.3 million chips per day.

Hence, the recent approval of two major semiconductor projects, backed by massive investments and cutting-edge partnerships, is proof that India means business.

Let’s take a closer look at the projects fueling this vision.

1. Kaynes Semicon

The latest entrant in India’s semiconductor journey is Kaynes Semicon, a wholly-owned subsidiary of Kaynes Technologies. Approved on 2 September 2024, this project is set to establish a state-of-the-art fabrication unit in Sanand, Gujarat, with an investment of Rs 33 billion.

This unit will churn out 6.3 million chips daily, serving a wide spectrum of industries like automotive, electric vehicles, telecom, and consumer electronics. With the automotive sector’s demand for semiconductors on the rise, Kaynes Semicon is well-positioned to cater to both domestic and global markets.

But the impact doesn’t stop at production. Kaynes is also investing in R&D by teaming up with IIT Bombay to drive innovation in semiconductor packaging—a critical part of the chip-making process.

How is the investment divided?

–50% or Rs 16.5 billion: Central government subsidy.
–20% or Rs 6.6 billion: State government support.
–30% or Rs 9.9 billion: Kaynes’ own investment, funded in part through a December 2023 fundraising round.

This public-private synergy is indicative of the seriousness with which India is tackling the semiconductor challenge.

2. Tata Electronics

If Kaynes Semicon is paving the road, Tata Electronics Private Limited (TEPL) is the behemoth clearing the path. A greenfield venture by the Tata Group, this project represents a giant leap for India’s semiconductor ambitions.

TEPL’s semiconductor fab in Gujarat, a Rs 910 billion investment, is being developed in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), a Taiwanese semiconductor heavyweight. With a manufacturing capacity of 3 billion chips annually, this facility will cater to industries ranging from high-performance computing to defense and consumer electronics.

Game-Changing Innovations

–The fab will produce 50,000 wafers per month, utilizing machine learning and data analytics for next-gen automation and industry-best efficiency.

–TEPL has inked multiple MOUs, including partnerships with ASMPT Singapore for assembly equipment and Tokyo Electron for equipment and services for its upcoming units.

But Tata Electronics isn’t stopping there. Its subsidiary, Tata Semiconductor Assembly and Test Private Limited (TSAT), is setting up a Rs 270 billion assembly and test facility in Morigaon, Assam. This unit, set to be operational by mid-2025, will produce 48 million chips daily, supporting industries like automotive, EVs, and telecom.

Additionally, TSAT is working on advanced semiconductor packaging technologies such as flip chip and integrated system in package (ISIP), ensuring India doesn’t just fabricate but adds value to its semiconductor output.

3. CG Power

Renowned for its expertise in electrical equipment, CG Power is making a bold entry into the semiconductor industry. The company has announced a joint venture (JV) with Renesas Electronics Corporation (Japan) and Stars Microelectronics (Thailand) to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat.

This Rs 76 billion investment, approved by the Union Cabinet, will focus on producing 15 million units daily. CG Power will hold a majority stake of 92.3% in the JV, while Renesas and Stars Microelectronics will bring cutting-edge technology and training expertise.

Key Highlights:

— The Gujarat government has allocated 28 acres for the facility.
–CG Power’s collaboration is complemented by land earmarked for Tata Group and Micron Technology, signaling Gujarat’s ambition to be India’s semiconductor hub. The facility will enhance India’s global standing in the semiconductor supply chain.

4. Suchi Semicon

Suchi Semicon, a Surat-based company, is set to become a pioneer with its US$ 100 million OSAT plant, Gujarat’s first semiconductor manufacturing unit. Scheduled to begin operations in November 2024, this plant will feature advanced cleanroom environments and have an initial capacity of 200,000 chips daily, scaling up to 3 million chips per day.

The project will unfold over five phases, starting with chips for legacy devices and expanding to power devices and advanced chips in subsequent stages.

The facility will create 1,200 jobs and collaborate with local academic institutions to nurture a skilled workforce.
Suchi Semicon’s ambitious plans include future ventures into semiconductor design, further bolstering India’s capabilities in this critical sector.

5. Micron Technology

A global leader in DRAM and NAND products, Micron Technology is spearheading India’s semiconductor journey with an Assembly, Testing, Monitoring, and Packaging (ATMP) plant in Sanand.

Micron’s US$ 28 billion investment includes US$ 825 million from the company itself, with government support from India’s US$ 10 billion semiconductor incentive scheme. The plant is on track to roll out its first chips by December 2024, with mass production expected in early 2025.

Global Reach

–Most chips produced will be exported, reinforcing Micron’s position in the global semiconductor market.
–Applications span data centers, smartphones, IoT devices, and even emerging sectors like two-wheeler EVs.
–Micron’s Gujarat operations have also attracted key suppliers, making it a focal point for India’s semiconductor supply chain.

The Final Words

The semiconductor industry isn’t just an opportunity for India—it’s a necessity.

India is uniquely positioned to play a leading role in the global semiconductor story with its tech ecosystem, skilled workforce, and growing consumer demand but challenges remain. The road to becoming a semiconductor powerhouse will not be easy and factors like securing raw materials, setting up a robust supply chain, and competing with established giants like Taiwan, South Korea, and the US will surely be tough.

Yet, with strategic initiatives like the US-India partnership and the new Sanand facility, India is laying a solid foundation. As the semiconductor industry continues to grow, India has the potential to not just be a consumer but a key player in shaping the future of technology.

Will India become a global semiconductor powerhouse or remain a market for foreign players to dominate?