Introduction
India's semiconductor industry is poised for significant growth, with the government's ambitious plans to establish a robust domestic manufacturing ecosystem. However, as the industry gears up for expansion, a critical challenge looms – the shortage of skilled semiconductor professionals. Recent criticism from renowned economist Raghuram Rajan regarding the government's $10 billion (Rs 76,000 crore) chip manufacturing subsidy package has shed light on the need for cost-effective strategies to create employment opportunities in the sector. Fortunately, a proposal by the Indian Cellular and Electronics Association (ICEA) offers a promising solution to address this talent gap at a fraction of the estimated cost.
The ICEA Proposal
The ICEA proposal suggests refurbishing an existing semiconductor fabrication (fab) facility to train individuals as semiconductor manufacturing professionals. This approach could skill workers not only for domestic requirements but also cater to the global demand for chip talent. The proposed plan involves the following key aspects:
1. Investment and Training Capacity: An investment of $200 million would be required to refurbish the existing fab facility. From the second year of operation, an additional $35-40 million would be spent annually to train 10,000 chip fabrication workers per year. With a course duration of six months, the facility could simultaneously train 5,000 students in each batch, effectively equipping 100,000 workers with semiconductor manufacturing skills over a span of 10 years.
2. Cost-Effective Approach: The ICEA estimates that the cost of creating highly skilled semiconductor manufacturing employment through this route would be approximately $5,600 per job or Rs 4.67 lakh per job. This figure is a staggering 99 percent lower than Rajan's estimate of Rs 4 crore per job created under the $10-billion chip package.
3. Financial Sustainability: To manage the running costs and ensure a return on the initial investment, the training fab could charge a nominal fee from students. This fee could be offset through higher-study bank loans or direct support from the central or state governments. For instance, considering an intake of 10,000 students per year, each student could be charged a fee of $12,000, with a government subsidy of $9,000, leaving the student with an out-of-pocket expense of $3,000. The government's partial support for student fees would amount to just $90 million for the initial five years.
4. Revenue Generation: The refurbished chip manufacturing facility is expected to have a capacity of 60,000 wafers annually. Assuming a 50 percent yield due to trainee operation, the facility could generate approximately $90 million per year at a selling price of $3,000 per commercial-grade wafer. This revenue stream could contribute to the ongoing operational costs of the facility.
The Global Demand for Semiconductor Talent
The demand for skilled semiconductor professionals is soaring globally, driven by the rapid expansion of the industry and the proliferation of chip-based technologies across various sectors. Recent reports highlight the extent of this talent shortage:
1. Talent Scouting Efforts: Top chipmaking companies from Taiwan, which produces more than 60 percent of the world's chips, went scouting for talent in other Southeast Asian countries last year but could hire only 316 candidates, underscoring the scarcity of skilled workers.
2. Job Posting Growth: Job postings for semiconductor technical roles in the European Union and United States rose at a compound annual growth rate of more than 75 percent from 2018 to 2022, according to a McKinsey report.
3. Projected Talent Gap: If the semiconductor sector does not become more attractive, the resulting talent gap for engineers is expected to widen significantly, with more than 100,000 each in the US and Europe, and upward of 200,000 in Asia–Pacific (excluding China).
4. Regional Disparities: Major disparities exist among countries in the Asia–Pacific region, with India being a potential net exporter of engineering talent, while countries like Japan and South Korea face severe shortages.
India's Opportunity in Semiconductor Talent Development
With an increasing number of fabrication plants (fabs) slated to come online globally, the shortage of semiconductor professionals is expected to intensify by the end of 2023. Deloitte's projections indicate a staggering need for over 1 million additional semiconductor workers by 2030, translating to an annual addition of more than 100,000 employees. India is well-positioned to address this demand with its vast pool of engineering students.
Each year, close to 2.5 million students enroll in undergraduate engineering programs across the country, with nearly 600,000 specializing in electronics, according to Statista. This abundance of engineering talent positions India as a key player in meeting the global semiconductor workforce requirements and supporting the industry's exponential growth.
Domestic Semiconductor Projects and Job Creation
The Indian government has recently approved a proposal by the Tata Group to set up a semiconductor fab under its mega chip subsidy scheme. The fab, to be set up by Tata Electronics and Taiwan's PSMC in Gujarat's Dholera, is projected to cost Rs 91,000 crore and will produce various types of chips, including 28 nanometer (nm), 50 nm, 55 nm, and 90 nm chips, for sectors such as electric vehicles, telecom, defense, automotive, consumer electronics, display, and power electronics.
Additionally, Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will establish a semiconductor packaging unit in Morigaon, Assam, with an investment of Rs 27,000 crore and the capacity to produce 48 million chips daily. These projects are expected to create a significant number of skilled jobs, with the fab in Dholera estimated to generate 20,000 direct and indirect skilled jobs, and the unit in Morigaon potentially creating 27,000 employment opportunities.
Conclusion
As India embarks on an ambitious journey to establish a robust semiconductor manufacturing ecosystem, addressing the talent shortage is paramount. The ICEA proposal offers a cost-effective and scalable solution to skill semiconductor professionals, capitalizing on the country's vast engineering talent pool. By refurbishing an existing fab facility and implementing a targeted training program, India can not only meet its domestic workforce requirements but also position itself as a global hub for semiconductor talent development. This strategic approach aligns with the government's vision of fostering a self-reliant and globally competitive semiconductor industry, while creating numerous high-skilled employment opportunities for the nation's youth.
Комментарии