India has world's 19% of chip designers but only 7% of design facilities: BCG

Various previous estimates have put the number of chip design engineers in India at around 3 lakh

Nineteen percent of the world’s chip designers are in India but the country accounts for only 7 percent of chip design facilities, consulting firm BCG has said in a report.

China has 28 percent of the world’s chip designers and 12 percent of design facilities, while the figures for the United States are 32 percent and 27 percent, respectively.

Europe, which is home to chip design majors like SoftBank-backed Arm, Infineon and NXP, is the only major geography where semiconductor design facilities (at 21 percent) trump the share of chip design engineers (at 4 percent).

Various industry estimates have put the number of chip design engineers in India at around 3 lakh.

While the government has focussed its Rs 76,000 crore ($10 billion) chip subsidy plan on semiconductor fabrication and packaging, experts have said the country should double down on chip design a higher value part of the semiconductor supply chain.

In an interview to Moneycontrol, union minister Ashwini Vaishnaw said a few months ago that the next version of the semiconductor package would focus more on the chip design ecosystem. It would aim to support end-to-end production of at least 10 chipsets domestically, including design, fabrication and packaging.

The cabinet has approved three projects worth Rs 1.26 lakh crore under the scheme, while US semiconductor major Micron was given the go-ahead last year to set up a unit.

The four projects are cumulatively expected to account for Rs 59,000 crore of the Rs 76,000-crore chip incentive scheme announced in 2021.

"I think it's very understandable to focus on chip design as it has a large value addition. But if you want to give a lot of jobs to low-paid workers, then chip packaging seems a good way to go," Chip War author Chris Miller said last year.

“Politicians in every country love manufacturing facilities because they can cut a ribbon and get a photo op.”

"If you look at the chip industry today, most of the value still lies in chip design. If you speak to TSMC, they might say we would rather be like Nvidia," he said.

Taiwanese TSMC is the world's largest chipmaker and a major Apple and Nvidia supplier. Nvidia is an American chip-makers and one of the biggest beneficiaries of the AI boom.