For Arnob Roy, co-founder of Tejas Networks, a reliable supply of computer chips is crucial.

His company, based in Bangalore, India, provides the equipment behind mobile phone networks and broadband connections.

“Essentially, we provide electronics that move traffic over telecommunications networks,” he said.

This requires special chips designed for telecommunications tasks.

“Telecommunications chips are fundamentally different from consumer or smartphone chips. They process massive amounts of data from hundreds of thousands of users simultaneously.

“These networks cannot afford to go down. Reliability, redundancy and fail-safe operation are critical – the chip architecture must support this,” Roy said.

Tejas designed many of these chips in India, which is known for its expertise in the design of computer chips, also known as semiconductors.

It is estimated that 20% of the world’s semiconductor engineers are in India.

“Almost every major global chip company has its largest or second largest design center in India, developing cutting-edge products,” said Amitesh Kumar Sinha, joint secretary of the Ministry of Electronics and Information Technology.

What India lacks is companies manufacturing semiconductors.

So Indian companies like Tejas Neworks design the required chips in India and then manufacture them overseas.

Weaknesses of the system Being exposed during Covidwhen chip supplies dried up and companies in various industries had to scale back production.

“The epidemic has clearly demonstrated that semiconductor manufacturing is too concentrated globally and that this concentration poses serious risks,” Roy said.

This has prompted India to develop its own semiconductor industry.

“The COVID-19 pandemic has shown us how fragile global supply chains are. If one part of the world shuts down, electronics manufacturing everywhere will be disrupted,” Sinha said.

“This is why India is developing its own semiconductor ecosystem to reduce risk and increase resilience,” he added.

He is leading the government to develop the semiconductor industry, which includes identifying parts of the production process where India can compete.

have Several steps in making computer chips. The first design, India is already very strong.

The second stage is wafer fabrication, where circuits are etched onto thin silicon wafers by extremely expensive machines in large factories called semiconductor “fabs.”

This part of the process, especially the most complex chips, is dominated by Taiwanese companies, while China tries to catch up.

In the third stage, these large silicon wafers are cut into individual chips, packaged in protective cases, connected to contacts and tested.

The third phase, called Outsourced Semiconductor Assembly and Test (Osat), is part of the targeted production process in India.

Ashok Chandak, chairman of the Indian Electronics and Semiconductor Association (IESA), said: “Assembly, test and packaging are easier to start than fabs, which is also the first move in India.”

Several such factories will “enter mass production” this year, he said.

Founded in 2023, Kaynes Semicon is the first company to set up and operate a semiconductor factory with support from the Indian government.

Kaynes Semicon is investing $260m (£270m) in a $260m (£270m) factory in the northwestern state of Gujarat to assemble and test computer chips. Production started in November last year.

“Packaging is more than just putting a chip in a box. It’s a 10 to 12-step manufacturing process,” said Raghu Panicker, CEO of Kaynes Semicon.

“That’s why packaging and testing is as important as making the chip itself, without this stage the wafer is useless to industry.”

His factories won’t produce the most advanced computer chips in the latest phones or the chips used to train artificial intelligence.

“India doesn’t need the most sophisticated data centers or AI chips on day one. That’s not where our needs are and it’s not where our advantage is today,” Panik said.

Instead, they will be chips used in the automotive, telecommunications and defense industries.

“These are not glamorous chips, but they are far more important economically and strategically for India. You build an industry by serving your own market first. Complexity can come later. Scale has to come first,” he added.

It’s been a steep learning curve for Kaynes Semicon.

“We have never built a semiconductor cleanroom in India before. We have never installed this equipment before. We have never trained on this before,” Panik said.

“Semiconductors require a level of discipline, documentation and process control that is very different from traditional manufacturing. This cultural shift is as important as the technology shift.”

Training employees is a huge challenge.

“Training takes time. You can’t reduce five years of experience to six months. That’s the biggest bottleneck,” Panik said.

Back in Bangalore, at Tejas Networks, Arnob Roy is looking forward to buying more locally sourced technology.

“In the next decade, we expect a significant semiconductor manufacturing base to emerge in India, which will directly help companies like ours.”

He said this was the beginning of a long journey.

“I do see Indian companies eventually designing and manufacturing complete telecom chipsets, but it will require patient funding and time.

“Deep tech products take longer to mature and India is only now starting to support such investments.”