Why Semiconductor & IoT GCCs Are Choosing India Over Southeast Asia

Cost is table stakes in any GCC decision. The key difference between the Semiconductor GCC India strategy and an entirely cost-based offshore development center approach in Southeast Asia lies in the richness and high level of talent that can be found.

Vietnam has become a significant hub for semiconductor packaging and testing, with the government investing $1.06 billion (VND 26 trillion) to educate 50,000 semiconductor engineers. Samsung has established a substantial manufacturing presence in the country. However, Vietnam’s talent pool for chip design is still in its early stages. The engineering graduates in the country tend to focus more on manufacturing operations rather than front-end design, RTL, or IP generation, which are the high-value tasks that Semiconductor GCC India centers specialize in. Additionally, the existing gaps in power infrastructure make it more challenging to scale up design-intensive operations.

Malaysia is the strongest Southeast Asian candidate for a semiconductor offshore development center, with decades of Assembly, Testing, Marking, and Packaging (ATMP) and a plan to train 60,000 qualified engineers under its National Semiconductor Strategy 2024, Malaysia has about 33 million workers overall, while India has 1.4 billion. The depth and quantity of chip-design experts in India just cannot be matched by the skill pool. For companies needing 500+ VLSI engineers at multiple experience levels, Malaysia runs short quickly.

The Philippines is recognized globally as a top outsourcing destination for software and business process solutions; however, its semiconductor design sector is still in the early stages of development. While there are initiatives to develop engineering talent in hardware design, the Philippines has virtually no established semiconductor GCC India equivalent history, no comparable fab or design infrastructure, and a talent pool primarily oriented toward software, call center, and IT services. For IoT GCC India-type mandates requiring embedded systems, FPGA, or SoC design expertise, the Philippines is not a competitive alternative today.

Semiconductor GCC in India is not just a talent game but an ecosystem of design that has been developed for over 30 years. Over 880 GCCs exist in Bengaluru alone, and Intel, Qualcomm, AMD, Texas Instruments, NXP, and Infineon, along with many others, have their design centers operating at full capacity and are responsible for products worldwide.

The IoT GCC India landscape mirrors this maturity. In these same cities there are VLSI design companies, EDA tools companies, embedded software companies, fabless start-ups, and a new group of semiconductor IP companies. The presence of these specialized companies generates an effect of networking that an offshore development center in Vietnam or Malaysia would take at least 10 years to create.

Key Design Ecosystem Indicators in India

• 50+ semiconductor startups are emerging, including Mindgrove Technologies (IoT SoC), Signalchip (wireless ICs), and Saankhya Labs (the first fabless company in India and the world’s first to produce software-defined radio chipsets).
• 280+ academic institutions and 70+ semiconductor startups are being supported through the Design Linked Incentive (DLI) initiative. 
•  India’s semiconductor exports are anticipated to surpass $20 billion by 2025.
• Major global firms such as AMD (with a $400 million investment and 3,000 engineers based in Bengaluru), Micron (establishing a $2.75 billion ATMP facility in Gujarat), and Applied Materials (investing $400 million in an R&D campus) are establishing a design hub.
• Lam Research has pledged to train 60,000 engineers in India over the next decade, directly investing in the nation’s offshore R&D talent pipeline.

The differentiation is crucial: multinational corporations establishing Semiconductor GCC operations in India are focusing on generating intellectual property, owning products, and managing the design-to-deployment processes. Meanwhile, multinational corporations launching ATMP-focused ventures in Southeast Asia are concentrating on advanced precision manufacturing. Both approaches hold significant value; however, they fulfill completely distinct strategic objectives.

One of the most significant differentiators for a semiconductor GCC is the scope and complexity of the incentive structure that is put into place by the government. The Indian government’s support towards the semiconductor and electronics industry has been the biggest national-level effort made in favor of any industry through the PLI program.

India’s Incentive Stack for Semiconductor & IoT GCCs

• Budget allocated to the Semicon India Program—the government’s biggest-ever sectoral expenditure program—is ₹76,000 crore ($10 billion).
• Fiscal support for the project cost of the project under the Modified Semiconductor Fab Scheme (technology nodes)—50%.
• Amount allocated under the ₹76,000 crore Production Linked Incentive plan: ₹65,000 crore.
• PLI scheme launched for electronic components in April 2025 – ₹22,919 crore.
• Design Linked Incentive (DLI) – 50% of qualifying costs towards design + 4% to 6% of net sales over five years – 50%/4%-6%.
• Overall financial assistance under all electronics and semiconductor incentive programs—$30 billion
• Availed under the DLI scheme before 2024, paying out ₹500+ crore for automotive SoCs, 5G modems, and AI chipsets for 32 startups.

The DLI program has specific significance in offshore R&D activities for India: it will provide reimbursement of 50% of IP development costs as well as provide an incentive of 4–6% of income-based deployment incentives, thus making chip design risk-free both for multinational companies and startups.

Incentives on the state level enhance the federal scheme. The GCC policy in Karnataka, the Beyond Bengaluru program, T-AIM (Telangana AI Mission) in Telangana, and a semiconductor drive by the government of Tamil Nadu all contribute extra financial benefits in terms of land, infrastructure, and human capital.

In global firms looking to make long-term plans for development offshore for 10 to 15 years, scalability emerges as the single-most critical issue. This is where the India-against-Southeast Asia GCC conundrum finds its resolution.

Scale of Workforce

India’s GCC workforce is expected to increase from 2.1 million in 2025 to roughly 3.4–3.5 million by 2030, with nearly one million high-skill positions added in the second half of the decade. IoT and semiconductor roles, including embedded firmware, verification, SoC design, analog layout, and AI inference, are the fastest-growing categories. In Southeast Asia, this depth of specialist talent is still unparalleled. Although 6 big cities account for 94% of India’s GCCs, Tier-2 sites like Pune, Ahmedabad, Coimbatore, Jaipur, and Kochi are quickly becoming scalable options. These cities provide

• 10–12% lower attrition
• 20–35% lower operating costs

By 2030, Tier-2 cities are expected to account for nearly 39% of the GCC workforce. This regional heterogeneity greatly lowers the danger of talent concentration for companies constructing large-scale centers (e.g., 5,000+ employees).

The Indian intellectual property regime has been bolstered significantly, with more funding allocated to patent processing facilities, dedicated IP courts, and enforcement systems for trade secrets. This is especially important for semiconductor and deep technology GCCs working on creating their own proprietary material, like chip design, RTL, and verification IP. Although India is still catching up to U.S. and European standards, its progress seems promising and exceeds that of Vietnam and the Philippines.

Global supply chains are changing structurally. India is becoming a major beneficiary of diversification away from China, as indicated by Kearney’s Reshoring Index.

• India offers political stability as a large democracy.
• It has no major territorial conflicts with the United States.
• It is actively strengthening semiconductor partnerships with the U.S., Japan, and the EU.
  

On the other hand, nations like Malaysia and Vietnam are still more vulnerable to supply chains connected to China and geopolitical balancing concerns, which might cause long-term uncertainty in GCC plans.

Revenue Scale of Mature GCC Operations

An indication of the level of maturity that India’s GCCs have reached can be seen in a remarkable statistic; for the fiscal year 2024–25, out of the GCCs functioning in India, 24 GCCs had surpassed the $1 billion revenue from exports, compared to only 19 GCCs in the last year. That would be the benchmark for any successful Semiconductor GCC India or IoT GCC India center to achieve.

For design-led semiconductor and IoT work, the India vs. Southeast Asia GCC debate is largely settled. With 20% of the world’s chip design talent, a 25-year GCC ecosystem, robust government incentives, and an expanding pool of senior semiconductor leadership, India boasts an unparalleled scale.

Southeast Asia has more specialized responsibilities, such as the Philippines in communication-driven services, Malaysia in packaging and testing, and Vietnam in packaging and testing, but none of them can match India’s depth in core engineering and design.

For a multinational corporation investing in a decade-long venture in designing chips, developing IoT solutions, and validating them, India offers the only ecosystem capable of operating at a true global scale.

The transition is apparent; India is no longer the answer to “why,” but rather the default option for firms seeking to create impactful and innovation-driven GCCs.