India Should Prioritize Semiconductor Packaging Over Fabrication, Says Arvind Virmani

Former NITI Aayog member Arvind Virmani stated India must prioritize semiconductor packaging and testing over immediate, capital-intensive fabrication. A phased strategy will secure a global competitive foothold and lay the groundwork for long-term manufacturing growth.

Packaging and Testing Offer a Practical Starting Point

Addressing the national semiconductor strategy, Virmani explained that India should prioritize building foundational capabilities in assembly, testing, marking, and packaging. This phased approach must precede any aggressive push into high-end, sophisticated silicon fabrication.

He emphasized that building cutting-edge fabrication facilities requires immense capital expenditure, highly proprietary technologies, and specialized talent pools. Because global market leaders hold entrenched positions, new market entrants face immense challenges trying to compete immediately.

Sustained competitive advantages will rely heavily on achieving massive production scale. Beyond building basic factory infrastructure, the nation must systematically cultivate ancillary component suppliers, robust logistical networks, dedicated research laboratories, and an exceptionally skilled technical workforce.

Long-Term Roadmap Targets Value Creation

Virmani’s recommendations directly mirror the strategic framework published in the official NITI Aayog report on domestic semiconductor development. That document advises building deep expertise in legacy mature nodes, specialized compound semiconductors, and advanced packaging options.

This initial focus creates an ideal gateway before transitioning toward highly complex fabrication technologies. The state strategy intends to retain significant economic value within the country by prioritizing engineering design, local packaging solutions, and domestic intellectual property.

The official national roadmap establishes clear milestones, aiming to satisfy between 15% and 25% of domestic chip demand by 2030.

Subsequently, policy targets dictate capturing 35% to 50% of the domestic semiconductor market by 2035. The overarching objective positions the country as a premier destination for advanced packaging while accelerating export metrics.

The Union Government has authorized numerous commercial ventures across the fabrication, assembly, testing, and packaging segments. These capital injections are managed directly under the administrative oversight of the India Semiconductor Mission framework.

Industry experts anticipate that these combined state incentives and infrastructural developments will bear fruit over the next decade. Persistent regulatory support and ecosystem maturity will likely transform the nation into a critical supply chain hub.

Future Outlook

The long-term trajectory of the domestic technology sector hinges entirely on the successful execution of this phased roadmap. By mastering assembly and packaging first, local enterprises can generate immediate revenue streams and foster industrial discipline.

This calculated strategy minimizes initial financial risks while systematically training thousands of specialized electronics engineers. Over time, this deep talent pool and mature domestic supply network will provide the necessary foundation for advanced semiconductor fabrication.

As global supply chains diversify away from traditional manufacturing centers, this methodology offers an optimized path toward technological sovereignty. Achieving these milestones will ultimately dictate the nation’s position in the global digital economy.

FAQs

Why should India focus on semiconductor packaging before fabrication?

Semiconductor packaging and testing require lower initial capital investments and less complex infrastructure than advanced fabrication. This strategy allows the country to build a mature industrial ecosystem, train a skilled workforce, and establish market presence before scaling up to high-end chip manufacturing.

What are the domestic demand targets set by NITI Aayog?

The official roadmap aims to fulfill 15% to 25% of India’s domestic semiconductor demand by the year 2030. Looking further ahead, the strategy targets meeting 35% to 50% of domestic requirements by 2035.

What is the role of the India Semiconductor Mission?

The India Semiconductor Mission is a government-backed framework that approves and supports manufacturing projects. It covers multiple segments of the production chain, including chip fabrication, assembly, testing, and advanced packaging, to position the country as a global electronics hub.