The Competitive Edge of Semiconductor GCCs in India

The semiconductor industry is at the heart of modern technology, powering everything from smartphones to advanced computer systems. With the growing technology, the demand for semiconductors in the global market is on the rise and India is emerging as a key player in the sector.

As per a report by NASSCOM-Zinnov, 30% of GCCs set up in Q3 CY2023 were from the semiconductor vertical. This blog explores the factors driving this growth, the current state of the semiconductors in India, and its implications for the future.

Here are the major factors which have driven GCC growth in India:

1. Availability of Engineers: The large pool of skilled engineers and technology professionals, especially in electronics, computer science, and software engineering plays a crucial factor for semiconductor GCCs as they play a pivotal role in semiconductor design, development, and testing.
2. Collaboration with Educational Institutions: Collaboration between GCCs and premier educational institutions enhances the quality of graduates entering the workforce, which in turn ensures that companies have access to defining skills relevant to semiconductor technology.
3. R&D: With significant investment in R&D activities, the companies create advanced semiconductor solutions customed for emerging technologies like AI and IoT. The rise of of R&D activities has led to an increase in patent filing, with over 33 patents granted alone in 2023 to GCCs operating in the sector. This embarks India’s growing capabilities in semiconductor innovation

Government Initiatives

To promote semiconductor manufacturing and design capabilities, the government of India has implemented several national and state-level initiatives including:

1. India Semiconductor Mission (ISM): The central government offers 50% of project costs on a pari-passu basis for establishing semiconductor fabrication facilities across all technology nodes.
2. National Policy on Electronics (NPE) 2019: To increase India’s share in the global value chain of electronics, the government facilitates the establishment of semiconductor wafer fabrication facilities and their ecosystem.
3. Gujarat Semiconductor Policy (2022): Gujarat was the first state to introduce a dedicated semiconductor policy, providing a 20% incentive on the approved project cost, in addition to the central government’s 50% incentive.
4. Uttar Pradesh Semiconductor Policy (2023): Following Gujarat, Uttar Pradesh also formulated its semiconductor policy offering a 25% incentive on approved project cost, complementing the central government’s 50% support.
5. Odisha Semiconductor Policy: The semiconductor policy of Odisha offers 25% incentives for investments in Silicon, Compound, Display, and Advanced Technology Manufacturing Plants (ATMP). The state government also provides 20% incentives for fabless products/IP companies, making a total of 70%, when combined with central support.

Geographical Diversification

1. Emergence of Tier II Cities: While major metros like Bengaluru and Hyderabad remain key locations for GCCs, there is a notable trend of expansion into Tier II cities such as Pune and Ahmedabad. This shift is driven by lower operational costs, improved infrastructure, and a growing pool of local talent.
2. Operational Flexibility: Companies are leveraging the benefits of geographical diversification to optimize their operations based on specific regional advantages.

Growing Demand for Semiconductors

1. Market Expansion: The global demand for semiconductors continues to rise due to the proliferation of electronic devices across various sectors such as automotive, telecommunications, and consumer electronics. This demand drives companies to establish GCCs that can develop tailored solutions.
2. AI and Machine Learning Integration: The increasing need for AI-powered devices has led semiconductor companies to invest heavily in developing specialized chips that can handle complex workloads efficiently.

Major GCCs in India

Semiconductor GCCs are research and development units set by semiconductor companies to leverage India’s talent pool and expertise in engineering and technology.

1. Signature IP: Dedicated to advancing Network-on-Chip (NoC), Signature IP established its GCC in 2023 in Bhubaneswar. Established as a research and development center, the center focuses on developing advanced NoC solutions. While collaborating with local institutes, research institutions, and semiconductor firms, the center aims to drive innovation and talent development in the NoC segment.
2. EdgeCortix: Specializing in crafting AI-specific processor architecture, EdgeCortix installed their Global Capability Center in Hyderabad. Focused on offering full-stack AI interface software development, and AI chips for boards and systems, the capability center delivers cloud-level performance at the edge, with better energy efficiency and processing speed, drastically reducing operational cost.
3. M31 Technology Corporation: Established in Bengaluru in October 2023 the R&D center helps the company with IP development, IC design, and EDA, encompassing memory compilers and standard library solutions.
4. Qualcomm: With engineering hubs in Bengaluru, Hyderabad, Chennai, and Delhi, Qualcomm’s global capability center specializes in complex engineering functions like wireless modem and multimedia software, DSP, embedded applications, and digital media networking solutions and plays a vital role in propelling Qualcomm’s research and development initiatives in 5G technology globally.
5. Nvidia: With its first center in Bengaluru in 2004, Nvidia has a total of 4 development centers in Hyderabad, Pune, Gurugram, and Bengaluru with over 320,000 developers participating in its developer program in India. Nvidia has collaborated with Reliance Industries to develop India’s large language model trained on the nation’s diverse languages. Along with it, Nvidia aims to reskill over 600,000 employees of Tata Consultancy Service (TCS).
6. Texas Instruments: Texas Instruments (TI) was the first company to set up its Global Capability Center in India in 1985 with its software design and R&D center in Bengaluru. Over the past 3 decades, the engineers of the India center have contributed to each of the major product developed globally by TI. The center employs over 7500 professionals across its various operations, with engineers playing a crucial role in developing entire chip design process, from concept to design, product engineering, testing, validating, and system software.
7. Intel: Intel established its GCC in Bengaluru in 1999 and currently employs over 13000 professionals, 90% of which are in engineering roles. The center plays a crucial role in designing and developing next-generation processors and system-on-chip (SoC) solutions. The center is engaged in developing revolutionary engineering solutions including SoC design, 5G network solutions, graphics, IPs, software, and platforms for the AI, data center, client, and edge markets. Intel has established Emsys Lab in IIT Bombay, collaborating with the institution focusing on electronic and embedded system design, prototyping, evaluation, and hardware-accelerated simulation.
8. AMD: Expected to host around 3000 engineers, AMD inaugurated its largest global design center, AMD Technostart Campus in Bengaluru, spanning across 500,000 square feet, featuring a modern R&D lab covering 60,000 square feet. The center focuses on semiconductor technology development, including advanced projects related to 3D stacking, artificial intelligence (AI), and machine learning. The engineers are involved in pivotal innovative development for the company including designing high-performance CPUs for PCs and data centers, as well as GPUs for gaming and adaptive SOCs for embedded devices.
9. Micron Technology: Expected to be operational in a few months by late 2024, Micron has planned to invest over $2.75 billion over 5 years to build a semiconductor facility in Sanand, Gujarat. The center will focus on assembly and testing of DRAM and developing a 1TB 232-layer TLC NAND flash memory chip, addressing the demand for domestic and international markets.

The other notable Global Capability Centers in the semiconductor industry include

1. NXP Semiconductors: With design centers in Noida, Hyderabad, Bengaluru, and Pune, the company employs over 2500 engineers in India and holds over 500 patents. Involved in R&D and product development, the GCC focuses on automotive and secure connectivity solutions.
2. Broadcom: Focusing on networking and broadband, the design center of Broadcom in Bengaluru contributes to various semiconductor solutions.
3. STMicroelectronics: The R&D center of STMicroelectronics in Greater Noida, Delhi-NCR focuses on microcontrollers and other semiconductor technologies. The capability center has been involved in one of the country’s largest semiconductor research and design operations.
4. Infineon Technologies: The design center of Infineon in Bengaluru works on power semiconductors and automotive applications, along with technology development for a diversification-driven chip design system.
5. Renesas Electronics: The center focuses on microcontrollers and automotive solutions.
6. Marvell Technology: With a presence in Bengaluru, Hyderabad, and Pune, the centers supplement the company’s operations with a focus on storage, networking, and security solutions.
7. Analog Devices: The engineering center of Analog Devices in Bengaluru specializes in high-performance analog, mixed-signal, and digital signal processing technology with pioneering Gigabit Multimedia Serial Link™ (GMSL™) and Gigabit Ethernet (GigE) link technology.
8. Lattice Semiconductors: The Lattice Semiconductors design center in Bengaluru focuses on low-power FPGAs and other programmable logic devices including the LatticeECP3 FPGA family, MachXO2 PLD family, CPLDs, and Programmable mixed-signal devices.
9. Microchip Technology: The R&D facility in Bengaluru and Chennai focuses on microcontrollers and embedded solutions, employing over 2,500 microchip employees.

The growth of GCCs in the semiconductor industry is fueled by the availability of skilled talent, supporting government policies, and a cost-effective ecosystem reflecting a comprehensive approach to chip development encompassing design, research, validation, and collaboration.

Scale your operations with India’s skilled talent and cost-efficient infrastructure by setting up your Global Capability Center in India. Partner with Inductus GCC and drive seamlessly through India’s diverse landscape. With the expertise of over 17 years, Inductus helps companies of all scales efficiently set up their GCC while taking care of all the prerequisites including resource allocation, location assessment, and compliance.

Send us an email to ho@inductsugroup.com to discuss your setup requirements.