Gearing up for a trillion-dollar semiconductor opportunity: Building a resilient supply chain

Semiconductors: The engine of the digital economy

Semiconductors are the foundation of today's digital economy-powering breakthroughs in consumer electronics, automotive innovation, financial services and healthcare. As digital adoption accelerates and smart technologies multiply, demand for advanced chips is soaring. By 2030, global semiconductor revenues are projected to surpass US $1 trillion, with an equivalent amount expected in new fabrication investments. This surge marks the dawn of the Siliconomy. An era where silicon no longer functions merely as a component, but as a geopolitical and economic driver influencing industrial policy, global competitiveness and sustainable development.

However, behind this growth lies a fragile supply chain. Concentrated manufacturing, soaring capital costs and a widening talent gap expose systemic vulnerabilities. The semiconductor industry stands at a crucial juncture-where extraordinary potential coexists with structural fragility. With evolving global trends and persistent challenges, there are some urgent actions required to transform the industry from fragile to antifragile, while also strengthening India's strategic role in the evolving silicon landscape.

Trends and challenges in the semiconductor ecosystem

The "Semiconductor Techade" is accelerating. Technologies like AI, IoT, 5G and AR/VR, are dramatically expanding chip use across sectors-driving innovation in connected mobility, industrial automation, digital healthcare and smart finance. But this rapid evolution brings new risks which the industry must address.

First, runaway costs which indicate that as nodes shrink, capital and R&D costs rise steeply-limiting participation to a handful of highly capitalized players. Second being productivity stagnation which shows that increased complexity in chip design is slowing productivity gains and time-to-market. Third, concentrated supply chains which highlights that 75% of global semiconductor capacity is concentrated in East Asia, with Taiwan, South Korea and China, producing 88% of sub-16nm chips-exposing the industry to geopolitical and climate-related disruptions. Finally, talent and sustainability gaps reveal that a global shortage of skilled engineers, coupled with rising ESG expectations and resource constraints like rare earths and ultrapure water, is tightening operational bandwidth.

The industry's future will depend not only on innovation but on how effectively it addresses these compounding pressures.

Resilience by design: Engineering future-ready supply chains

In an era of global shocks, supply chain resilience must be deliberately built-not assumed. From natural disasters to geopolitical tensions, the industry needs infrastructure that can predict, adapt and recover fast. Resilience requires more than redundancy. It demands coordinated action, technology integration and long-term planning.

Five pillars form the foundation of a future-ready semiconductor ecosystem:

· Geographic diversification: Spreading manufacturing and OSAT facilities across multiple regions reduces dependence on single markets and mitigates geopolitical risk

· Collaborative capital models: With over US $2.3 trillion in fab investments expected by 2032, funding must combine public incentives with private investment-enabled by structured programs like India's PLI and DLI

· Digital intelligence: Tools like digital twins, AI-enabled demand sensing and real-time control towers, offer predictive insight across logistics, suppliers and equipment

· Sustainable operations: ESG-aligned practices-such as circular water systems and renewable energy use-are critical to long-term viability

· Policy alignment and infrastructure planning: National semiconductor strategies must be aligned with industry roadmaps. With new fabs costing US $18-20 billion, governments must streamline approvals, support talent development and enable global standards compliance

India’s strategic semiconductor opportunity

India is shifting from a global design leader to an emerging powerhouse in chip fabrication and advanced packaging. With nearly 20% of the world's IC design talent and a domestic electronics market projected to reach US $270 billion by 2032, India is rapidly scaling up through infrastructure, capital and policy.

Several high-impact projects are already reshaping the country's semiconductor trajectory.

This marks a definitive move from "design-only" to a fab-plus-OSAT model. However, to sustain global competitiveness, India must address four key enablers which are reliable power and ultrapure water infrastructure, domestic supply of critical materials, scaled-up talent pipelines-250,000 skilled engineers by 2030 and streamlined logistics, bonded corridors and digitized customs.

India now has a chance to not just expand capacity, but to build a resilient innovation-driven ecosystem at the heart of the global silicon economy.

The path forward: From momentum to maturity

As the Siliconomy takes hold, the semiconductor industry must evolve from scaling fast to scaling smart. Strategic resilience, not just output, will define the next decade. Stakeholders must act collaboratively to future-proof the value chain.

Six imperatives will shape the path ahead:

· Deep-tech and system-level innovation: Co-designing silicon, software and systems, is the new benchmark.

· Scalable talent development: Global, interdisciplinary training programs are needed to close the skills gap.

· Cluster-based ecosystems: Co-locating fabs, design hubs, OSATs and test labs, accelerates innovation and efficiency.

· Smart incentives and policy enablement: Subsidies must align with ESG goals, site readiness and operational needs.

· Global collaboration and diversified sourcing: Building partnerships and alternate supply routes reduces exposure to disruption.

· Operational intelligence: Real-time KPIs for yield, energy, water and carbon, must guide performance and sustainability.

By embedding these priorities into global strategies, the industry can shift from reactive growth to intentional, intelligent transformation-laying the foundation for long-term digital prosperity.

Conclusion: From fragile to future-ready

The trillion-dollar semiconductor era is here but success depends on more than capacity. In this high-stakes, fast-moving market, resilience is the ultimate advantage. Companies and countries that embed agility, sustainability and digital intelligence into their semiconductor value chains will lead the next wave of global innovation.

(Views are personal; the author is Corporate Vice President and Head of Engineering & R&D Services, HCLTech)