As global demand for display technologies continues to soar, India is vying to establish itself as a competitive player in the display fabrication (fab) industry.
Despite recent strides in silicon semiconductor manufacturing, experts highlight significant hurdles in India's journey toward building a thriving domestic display fab ecosystem.
Unique challenges for display manufacturing
Danish Faruqui, CEO of Fab Economics (Greenfield Fab/ATP Projects Advisory Consultancy) and a leading voice in semiconductor policy, points out that while India has made progress in silicon CMOS fabs, the display segment poses unique challenges.
"Display Fab manufacturing has distinct success factor requirements, along with very different geopolitics dynamics and global competition compared to silicon semiconductor fabs," Faruqui noted.
One critical barrier is the high capital expenditure (CAPEX) required to establish display fabs in India. The government's policy mandates a minimum investment of INR10,000 crore (US$1.2 billion) for subsidy eligibility, which Faruqui explains is prohibitive for most Indian business houses.
Furthermore, the policy restricts subsidies to advanced technologies like Gen 8 or above for TFT LCDs and Gen 6 or above for AMOLEDs, significantly narrowing potential investment opportunities.
Cost and ecosystem gaps
Faruqui emphasized that the operational dynamics of display fabs differ significantly from those of semiconductor fabs.
According to Fab Economics, the manufacturing process overlap between display and silicon CMOS fabs could be around 40% or less depending on the display technology. The overlap in materials and equipment requirements is even smaller, often limited to the low double digits.
The Total Cost of Ownership (TCO) for display fabs further highlights these differences. "Comparison of CAPEX and OPEX cost structures reveals that setting up a display fab, such as an LCD-TFT (Gen 8 or above) or AMOLED (Gen 6 or above), in India could have a differential as high as 50% than a silicon CMOS semiconductor legacy node fab of comparable capacity," Faruqui explained.
Additionally, display manufacturing is heavily reliant on specialty and bulk industrial gases, which require distinct purity and delivery mechanisms. This, coupled with the specialized material and equipment needs, underscores the necessity of a tailored policy framework for display fabs in India.
Global competition and lessons for India
India faces fierce competition from global leaders like China, South Korea, and Japan, which dominate the display manufacturing landscape.
"China has now exceeded 70% market share in LCDs and over 50% in OLEDs," Faruqui said. Chinese firms such as BOE and TCL have leveraged state-level policies and extensive automation to achieve this dominance.
To compete effectively, India must adopt a strategically informed policy that incorporates lessons from these countries while addressing its unique geopolitical and economic context.
"India needs a display segment policy that is strategically informed with the success factors of competing regions," Faruqui suggested.
Economic and strategic imperatives
The urgency for domestic display manufacturing extends beyond economic benefits. Faruqui warns that "Having 100% reliance on foreign imports across industrial and defense needs makes India vulnerable on both economic competitiveness and national security fronts."
The reliance on imported display components for consumer electronics, automotive, and defense sectors highlights the pressing need for a self-reliant ecosystem.
Moreover, the global display market is expected to double by 2032, growing faster than the silicon semiconductor market. This represents a significant opportunity for India, provided it acts swiftly to establish its presence.
Building a skilled workforce
A critical bottleneck for India's ambitions lies in the shortage of skilled talent.
"Currently, India does not have trained talent for display fabs," Faruqui acknowledged. In the short term, he suggests introducing a "CHIP Maker Visa" program to attract global expertise. However, a long-term strategy must focus on developing a robust domestic talent pool.
Fab Economics forecasts that India could produce up to 300,000 skilled semiconductor professionals over the next decade, potentially becoming a leading exporter of talent.
"India's domestic manufacturing talent strategy is the key component CEOs are seeking before site selection," Faruqui remarked.
The way forward
India's aspirations in the display fab industry hinge on implementing a comprehensive, competition-informed policy framework, addressing talent shortages, and fostering an ecosystem tailored to the unique demands of display manufacturing.
As Faruqui aptly put it, "The cost of inaction is high, and India must avoid a 'too little, too late' scenario."
By leveraging its growing consumer base and strategic initiatives, India can position itself as a global hub for display technology—a critical step toward securing its place in the rapidly evolving semiconductor ecosystem.