By Yasutaka IHARA, Director & Corporate Officer, TANAKA PRECIOUS METAL TECHNOLOGIES Co., Ltd.
India’s semiconductor industry is entering an important stage of its development. In recent years, the country has taken significant steps to strengthen its position within the global semiconductor landscape, backed by initiatives such as the India Semiconductor Mission (ISM) and the Production-Linked Incentive (PLI) scheme. These efforts have accelerated investments in semiconductor manufacturing and Assembly, Testing, Marking, and Packaging (ATMP) facilities, laying the foundation for a domestic semiconductor ecosystem.
As the semiconductor ecosystem continues to develop, attention is naturally shifting beyond manufacturing capacity toward the broader capabilities that support long-term industry competitiveness. This reflects a broader trend across the global semiconductor industry. As semiconductor technologies continue to evolve—driven by artificial intelligence (AI), high-performance computing (HPC), advanced packaging, testing, and increasingly complex device architectures—competitive advantage is being shaped not only by fabrication capacity, but also by advanced materials, engineering expertise, process technologies, and collaboration across the semiconductor value chain. Among these enabling technologies, advanced materials have become increasingly important as semiconductor manufacturers seek to meet higher expectations for performance, manufacturing consistency, process compatibility, and long-term reliability.
That shift matters because semiconductor leadership is not defined solely by the ability to manufacture chips. It is increasingly determined by how effectively the broader ecosystem supports manufacturing excellence, innovation, and long-term reliability. India is beginning to strengthen these capabilities by placing greater emphasis on research and development, chip design, advanced materials, semiconductor equipment, and specialized talent. This marks an important evolution from establishing manufacturing capacity to developing the ecosystem required to support sustainable semiconductor growth.
Despite the momentum around local manufacturing, more than 90% of India’s semiconductor demand continues to be met through imports, according to Deloitte. At the same time, demand itself is accelerating rapidly, driven by AI, electric vehicles, data centres, telecommunications, and electronics manufacturing. As the market continues to expand, strengthening the capabilities that support semiconductor manufacturing will become just as important as expanding manufacturing capacity itself.
The opportunity is significant, but so is the challenge of building a resilient semiconductor ecosystem capable of supporting this growth over the long term. India’s semiconductor market could potentially expand sixfold in the next decade from roughly USD 45–50 billion in 2024-25. Experience from mature semiconductor industries shows that sustainable competitiveness is built not only through investment, but also through the steady development of manufacturing expertise, advanced materials, engineering capability, and close collaboration across the semiconductor value chain.
The Capabilities Behind Semiconductor Manufacturing
In discussions about semiconductor manufacturing, attention is often focused on fabrication facilities and advanced packaging technologies. Yet some of the most important factors influencing manufacturing performance lie much deeper within the value chain. Advanced materials are one of these less visible, but increasingly strategic, enablers.
The reliability, efficiency, and longevity of modern semiconductor devices depend heavily on the advanced materials used throughout semiconductor manufacturing, packaging, and testing stages. While these materials are rarely visible in the finished device, they often make the difference between stable, scalable manufacturing and inconsistent production performance.
As semiconductor technologies continue to evolve, so do the demands placed on these materials. Innovation starts with research and development. As semiconductor requirements become more demanding, advanced materials must balance multiple requirements—including electrical and thermal performance, reliability, manufacturing consistency, and process compatibility—without compromising the performance required for each application.
Among advanced materials, precious metals occupy a unique position because of their combination of electrical conductivity, corrosion resistance, thermal stability, and chemical durability. In India, as semiconductor technologies evolve, these intrinsic properties have enabled precious metal materials to support increasingly demanding requirements in semiconductor packaging and testing, with applications in front-end processes expected to grow subsequently.
Consider bonding wires, for example. These ultra-fine interconnection materials are widely used to establish electrical connections between semiconductor chips and package substrates, directly influencing electrical performance and long-term device reliability.
Conductive adhesive pastes perform another equally important role by attaching semiconductor chips to substrates while providing the thermal and electrical performance required for high-power applications such as AI infrastructure and electric vehicles.
Similarly, advanced probe pin materials used in semiconductor testing help enable accurate and reliable electrical measurements across both front-end and packaging processes as device geometries become smaller and test densities continue to increase.
Beyond packaging and testing, there is also growing interest in advanced precious metal materials for front-end semiconductor processes. High purity sputtering targets and advanced plating solutions support the formation of thin films and conductive structures with the uniformity, precision, and reliability required for increasingly advanced semiconductor devices.
Precious metal technologies can support different stages of semiconductor manufacturing in India—from packaging and testing to a growing range of front-end processes—while sharing a common purpose: enabling stable manufacturing, high device performance, and long-term reliability. The role of precious metals has evolved alongside semiconductor technology itself—from enabling reliable electrical interconnections in earlier generations of semiconductor devices to supporting thermal management, manufacturing precision, and long-term reliability in today’s increasingly sophisticated semiconductor architectures.
As manufacturing tolerances continue to tighten, even small variations in material purity, microstructure, or process consistency can influence yield, performance, and operational reliability.
These technologies may appear highly specialised, but collectively they form the advanced materials foundation that enables semiconductor manufacturing, innovation, and long-term device reliability.
Building capability beyond the fab
India’s semiconductor strategy has rightly prioritized attracting investments in fabrication and Assembly, Testing, Marking, and Packaging (ATMP) facilities. These investments are essential. Over the longer term, however, the competitiveness of the semiconductor ecosystem will depend equally on the capabilities that support manufacturing, including advanced materials, engineering expertise, supplier networks, and research and development.
As semiconductor technologies continue to evolve, supply-chain resilience and manufacturing consistency are becoming increasingly important, particularly for advanced materials that support AI, telecommunications, high-performance computing, and next-generation electronics. Developing these capabilities requires more than expanding production capacity. It depends on close collaboration between manufacturers, materials suppliers, equipment companies, research institutions, and technology partners to accelerate innovation while maintaining quality, consistency, and reliability.
Experience from mature semiconductor ecosystems shows that manufacturing excellence is built through the steady development of these supporting capabilities rather than manufacturing capacity alone. TANAKA has long-standing expertise in advanced precious metal materials for semiconductor packaging and testing, while continuing to explore opportunities in front-end applications. As semiconductor manufacturing has become increasingly sophisticated, the conversation has expanded beyond individual materials to how materials, manufacturing processes, and engineering expertise work together to enable consistent, high-quality semiconductor production. Over time, close collaboration across the semiconductor value chain enables improvements in materials, processes, yield, and manufacturing know-how, helping industries adapt to increasingly complex technology requirements.
Having supported semiconductor manufacturers across multiple generations of semiconductor technology, TANAKA has observed that the most resilient semiconductor ecosystems are characterized by long-term collaboration between customers, materials suppliers, equipment companies, and research institutions. These partnerships not only support technology development but also help establish the process discipline and technical expertise needed for reliable, high-volume manufacturing.
As India’s semiconductor ecosystem continues to evolve, engagement with global technology partners can complement domestic capabilities by strengthening materials expertise, process development, and manufacturing know-how, contributing to sustainable industry growth and long-term competitiveness.
A strategic opportunity
What is becoming increasingly clear is that India’s long-term semiconductor competitiveness will depend not only on expanding manufacturing capacity, but also on strengthening the ecosystem that supports it. Advanced materials, engineering expertise, supplier networks, research capabilities, and collaboration across the semiconductor value chain will all play an important role in enabling sustainable industry growth.
India is entering an important stage in its semiconductor journey. The discussion is no longer centered solely on increasing manufacturing capacity, but increasingly on strengthening capabilities across chip design, advanced materials, manufacturing, packaging, and testing that support a globally competitive semiconductor industry.
Building a competitive semiconductor ecosystem takes time. Around the world, the most successful semiconductor industries have evolved through the steady development of manufacturing expertise, process technologies, supplier networks, and close collaboration between manufacturers, materials suppliers, equipment companies, and research institutions. These capabilities have matured together, enabling continuous improvements in quality, reliability, yield, and innovation.
For India, this represents a significant opportunity. As AI, digital infrastructure, advanced electronics, and high-performance computing continue to reshape global semiconductor demand, strengthening the capabilities that support manufacturing will become just as important as expanding manufacturing capacity itself. At the same time, strengthening domestic manufacturing capabilities while continuing to collaborate across the global semiconductor value chain can further support India’s long-term competitiveness.
From our experience, the strongest semiconductor ecosystems are not defined by individual technologies or manufacturing facilities alone. They are distinguished by the way materials expertise, engineering capability, manufacturing excellence, and long-term collaboration evolve together. These less visible capabilities often become the greatest differentiators as semiconductor technologies continue to advance.
Ultimately, semiconductor leadership is built not only through manufacturing capacity, but through the foundations that enable consistent manufacturing excellence, innovation, and long-term reliability. As India’s semiconductor ecosystem continues to mature, these capabilities will play an increasingly important role in supporting sustainable industry growth and strengthening the country’s contribution to the global semiconductor industry.