Back in 2002, Professor Yuan Taur, an esteemed electrical engineering expert at the University of California, San Diego, extended a significant opportunity to his Indian master’s student, Anuj Grover. He invited Grover to pursue a PhD focused on device design. However, Grover, driven by a desire to return to India and concerned about limited job prospects in this specialized field back home, reluctantly declined the offer.
Fast forward to today, and Grover, now a full-time professor and head of the Centre for Intelligent Product Design (CiPD) at the Indraprastha Institute of Information Technology (IIIT) Delhi, reflects on that moment: “Today, if I had to make that same decision, I would have jumped at the opportunity.”
In our modern, technology-driven world, semiconductors, often called ‘chips,’ are fundamental. These tiny components regulate electricity flow in nearly every device, from common household appliances like refrigerators and cars to advanced systems like satellites and defense technology.
A major factor in Grover’s changed perspective is the significant government backing now directed towards electronics manufacturing, especially semiconductors. The India Semiconductor Mission, launched in 2021 with an allocation of ₹76,000 crore, aims to position the country as a global leader in electronics manufacturing and design. Over the past two years, this initiative has already led to the approval of ten major chip manufacturing and assembly facilities across six states: Gujarat, Punjab, Uttar Pradesh, Assam, Odisha, and Andhra Pradesh.
Globally, the semiconductor industry faces a looming crisis: a shortage of chips and, critically, semiconductor designers. Deloitte projects a deficit of one million designers by 2030. India, with its vast talent pool, represents a beacon of hope. Industry estimates suggest that one-fifth of the world’s chip designers reside in India, many working for multinational giants like NVIDIA and Intel on extensive campuses. In the 2021-22 academic year alone, 5.7 lakh students enrolled in electronics engineering graduate programs. Despite this promising talent, the Indian chip-design industry still grapples with several challenges.
India’s Advantage in Chip Design
Currently, facilities for fabricating and assembling semiconductors—the foundational components of modern electronics—receive subsidies covering up to half their setup costs. Additionally, various production-linked incentive programs support phone, PC, and other hardware assembly units by providing subsidies based on a percentage of each device’s value.
However, this strategy has drawn criticism. Former Reserve Bank of India governor Raghuram Rajan, alongside Rohit Lamba, has cautioned that without sustained subsidies, companies might simply relocate to other markets offering more favorable conditions for electronics manufacturing. Government officials, while acknowledging these concerns, staunchly defend the policy, highlighting the critical geopolitical importance of establishing domestic control over global chip production.
Despite India’s thriving IT services sector—a model often championed by figures like Rajan—the government remains firm on the necessity of a robust electronics industrial base. The global chip shortages experienced during the COVID-19 pandemic starkly demonstrated the fragility of supply chains, reinforcing the government’s resolve. Interestingly, both Rajan and the government agree on the paramount importance of intellectual property and design, an area where India already holds a strong position. Critics argue that this burgeoning design sector didn’t require the same level of incentives as large-scale industrial projects. While chip fabrication demands immense investment in resources like ultra-pure water, stable electricity, and imported heavy machinery, chip design primarily relies on specialized software and modest testing equipment.
The ‘City Planning’ of Semiconductors
Despite their minuscule size—individual phone chips are often no larger than a fingertip, and even circuit boards housing multiple chips aren’t significantly bigger—Professor Grover of IIIT-Delhi finds an apt analogy for the complex world of chip-making: a city.
Grover meticulously draws parallels between urban development and chip creation. “In a city, you need town planners, architects, masons, carpenters, plumbers,” he explains, assigning each role an equivalent in the semiconductor realm. Semiconductor architects act as ‘town planners,’ combining management acumen with technical knowledge to define a chip’s general functionalities and budget. Designers then translate these directives into action, simulating circuits using advanced Electronics Design Automation (EDA) software. For fully operational ‘fabless’ firms, this also involves rigorously testing fabricated samples from overseas to ensure they can endure the harsh realities of temperature fluctuations, humidity, dust, and other environmental stressors.
Anuj Grover draws a vivid comparison between the intricate process of chip-making and the complex functioning of a city. Just as a city relies on various professionals like architects, masons, carpenters, and plumbers, chip development requires semiconductor architects and designers to ensure its proper operation.
This ‘city’ analogy is no overstatement. Modern chips are incredibly sophisticated; a microscope only reveals a fraction of their complexity. They comprise countless layers of crisscrossing circuits, with billions of individual transistors integrated into a single unit. This extreme intricacy explains why only a handful of nations lead in chip fabrication. The technology demands such precise equipment that even minute water impurities or imperceptible power fluctuations can compromise an entire production run.
Democratizing Access to Design Software
As a crucial component of the Indian Semiconductor Mission’s Chips to Startups (C2S) program, the Union government has made a significant investment. It acquired bulk licenses for advanced software suites from leading Electronics Design Automation (EDA) tool developers, including Germany’s Siemens and U.S.-based Cadence and Synopsys. This initiative has granted dozens of Indian colleges unprecedented access to these powerful tools. A government-maintained dashboard proudly reports that students have collectively accumulated millions of hours utilizing this essential software.
“Before the C2S program, we were paying ₹3–4 lakh annually just for renewal fees from a single provider,” states Nilima Warke, a professor at the privately-run VES Institute of Technology. Now, her students and faculty enjoy free access to four distinct professional toolsets, a significant upgrade from the previously limited academic versions. This change is revolutionizing their training.
Warke and a colleague recently designed a 180 nanometer (nm) chip, currently being ‘taped out’ at the Semiconductor Lab in Mohali. She notes that while 180 nm chips are considered ‘legacy’ nodes—larger than the cutting-edge 3–7 nm chips found in advanced smartphones—this hands-on experience marks a significant shift from purely academic training. Warke anticipates that within a few years, university students will be tackling designs at the industry’s most advanced levels.
Even without direct government software support, Indian semiconductor design firms have already achieved remarkable success. Tessolve, a Bengaluru-headquartered design company established in 2004, boasts offices in nine Indian cities and operations in ten other countries. After the Hero Group acquired a majority stake in 2016, Tessolve recently announced raising an impressive $130 million. CEO Srini Chinamilli, speaking via Zoom from Singapore, highlights their strategy: “A lot of the cities we operate out of are Tier-2. There are lots of people who are looking for opportunities in places where they have more emotional connect.” This signifies a growing trend of talent seeking opportunities closer to their hometowns.
A technician performs a semiconductor die inspection at Tessolve Semiconductor in Bengaluru.
This decentralized approach has proven highly effective, according to Chinamilli, with professionals successfully contributing from major hubs like Hyderabad and Bengaluru, as well as from smaller cities such as Visakhapatnam and Coimbatore.
Bridging the Student-Industry Divide
“The industry became far more comfortable with remote work after COVID,” Chinamilli observes. While government backing has provided some advantages, and India’s design sector shows promise, university-level chip expertise still lags behind the U.S., a leader in cutting-edge research. The critical questions remain: why this disparity, and how can India close the gap?
Chinamilli advocates for proactive collaboration: “Universities should tie up with the industry, ensuring their training addresses real-world problems and aligns with industry’s employability needs.” Grover heartily agrees, yet highlights a critical hurdle: “In India, industry invests a mere 0.4% of its profits or revenues into academic research and development.” This contrasts sharply with the U.S. and South Korea, where investment is 10 to 15 times higher. In the U.S., Grover explains, such academic-industry partnerships not only better prepare graduates but also yield profound benefits for the industry itself.
Grover cites the example of Andrew Kahng, another UC San Diego professor whom he considers a global authority on EDA tools. “He was a worldwide authority in EDA tools because when I was working in his lab in 2002, Cadence engineers would visit us,” Grover recalls. “They would say, ‘We anticipate a certain problem arising three years from now. Can you begin developing algorithmic solutions for it?’”
This model provided graduate and Ph.D. students with direct insight into chip design’s most pressing challenges, enabling them to contribute meaningfully to the industry immediately, without extensive additional training. Simultaneously, EDA tool developers funding these academic endeavors—for instance, through Ph.D. student stipends—gained early access to research preprints. This offered them a competitive edge, often a few months to a year’s lead over rivals, a vital advantage in an industry defined by rapid iteration and improvement.
Grover points out that investing in Ph.D. stipends for theoretical problem-solving is considerably more cost-effective than hiring full-time employees for similar cutting-edge R&D. Yet, many Indian firms appear reluctant to shoulder even this modest expense. “They are perfectly willing to fly down an expert and pay lakhs, even with limited follow-up,” he laments, highlighting a missed opportunity for sustained, in-house innovation.
He recounts an instance where a major, unnamed IT company hesitated to sponsor a Ph.D. candidate, even at a below-average rate, despite the research being directly relevant to their business. Furthermore, multinational corporations often lack strong incentives to collaborate with Indian academics outside of specific areas already well-established within the country. “Why would a French company sponsor Indian Ph.D.s?” Grover queries, underscoring the need for stronger indigenous research initiatives.
Grover identifies a broader systemic problem within India’s electronics ecosystem: the erosion of its industrial base, even for basic components. “There was a time when Indian companies exported supercomputers to nations like Germany and the U.S.,” he remarks with concern. “Now, even a simple ceiling fan controller is imported.” This highlights a significant decline in domestic manufacturing capabilities.
Beyond the Chip: The ‘Product Nation’ Vision
Ultimately, Grover asserts, the chips themselves represent only a fraction of the electronics ecosystem’s total value. Gesturing with his teal iPhone, he poses a rhetorical question: “What do you think an iPhone’s bill of materials is?” He explains that the cost of all components and their assembly accounts for merely 31% of the device’s retail price.
The vast majority of the value, he emphasizes, lies in design and intellectual property. While chip design contributes to the chip’s value, which in turn is part of the bill of materials, India needs to aspire higher. To truly capitalize on the potential of these components, the nation must transform into a “product nation”—a creator of globally desirable goods. Design, he stresses, is paramount to this vision. “Even the button placement on this phone is patented,” Grover notes, illustrating the pervasive importance of innovative design.
On a positive note, the hiring trend in semiconductor design and hardware testing remains robust. A BITS Pilani graduate recently shared on X (formerly Twitter) that NVIDIA recruited over 60 students during placements, humorously dubbing it the “BITS Pilani NVIDIA campus.” This strong demand stands in stark contrast to the broader slowdown affecting other segments of the tech industry.
“Now, it’s only about the will,” Grover concludes, underscoring his belief that all the necessary ingredients for India’s success in this critical sector are already in place.