The celebrity stratosphere to which the information technology (IT) corporate giants gravitated required a Y2K moment during the late 1990s which en masse lifted them to a new orbit of global and competitive excellence in the software services industry.

The Indian IT industry is likely to surpass $250 billion for 2023-24. The journey from a $1 billion in 1996 to $250 billion by 2024 saw its own booms and busts, the trigger boom being the Y2K bug.

This millennium bug flooded the Indian IT industry with abundant opportunities for all vendors – big to small. The Indian IT industry used this opportunity to leverage its talent at a scale unprecedented to showcase its IT prowess at the global stage. Rest is history!

Flagship schemes

If there is going to be an emerging parallel to the Indian IT industry growth story, it is undoubtedly going to be the Indian semiconductor industry. The growth of Indian IT industry through the creation of Software Technology Parks (STPIs) and Special Economic Zones (SEZs) is seeing its counterparts in the Indian Semiconductor Mission (ISM) and the Production Linked Incentive (PLI) schemes.

These two flagship initiatives have amplified the buzzing of the chip bugs. The scale of impact is catalyzing a multidimensional turnaround in policy, investments, talent capacity building, etc., all of them converging to script India’s chip story. This story has success precedence in India’s IT/ITES history that had periodic milestones from Y2K to ERP to Cloud to IoT to AI and so on. One of the largest contributors to this success story is the talent building that predominantly happened outside the IIT ecosystem.

Non-IIT talent

The growth of private engineering colleges during the period 1990 to 2010 was one of the single largest contributors with graduates from non-IITs and affiliated colleges being an integral part of the IT/ITES value chain.

A similar model of capacity building is required as India prepares itself to transform the semiconductor manufacturing value chain – both semiconductor and components and in electronics manufacturing services whose market size is estimated $350 billion by 2026.

With the global semiconductor value set to double in the next six years to touch $1 trillion, India’s share in manufacturing and ATP is also bound to increase with the gameplan to produce 300 crore chips annually to not only meet domestic chip demand by 2029 but also export.

Micron’s $800-million semiconductor plant followed by recent approval to Tata Group and CG Power for fabrication and ATP plants with an investment of ₹1,30,000 crore (and more in the pipeline) are the beginning of a transformational global supply chain shift centered around chip manufacturing in India. This will create a multiplier effect on talented and skilled workforce inside India.

It’s a matter of pride that almost one-third of the global semiconductor talent pool is Indian. However, the need for domestic semiconductor workforce is estimated to be around 3,00,000 by 2026. In addition, there is also a huge manpower requirement of almost six million in the electronics manufacturing sector which will be the largest beneficiary of this chip boom.

The current combined STEM graduate output from India’s higher education institutions is inadequate.

The growth is certainly going to come from the non-IITian orbit and the policy pathways of the Ministries of Electronics and IT and Education converge to present bountiful opportunities for industry and academia to work together.

This industry-academia synergy was key to India’s software success story. Now a similar trifecta of government-industry-academia is needed to make this a winning semicon trio. In short: India’s Y2K 2.0 version is embedded in a chip.

The writer is Vice-Chancellor & TATA Sons Chair Professor of Management, SASTRA Deemed University, Thanjavur