While Gujarat boasts about OSATs and fabs, the Indian state of Kerala is charting a different path with its design-first semiconductor roadmap that focuses on chip design, testing and IP creation rather than competing to build multi-billion-dollar fabs.

Unveiling the state’s Vision 2031 framework at ReCode Kerala 2025, Chief Minister Pinarayi Vijayan said Kerala aims to create half a million jobs in the IT sector within the state itself, capture 10% of India’s IT market share and grow the sector’s economic output to ?4.41 trillion (about $49.7 billion) by 2031.

“Kerala, which once set benchmarks in land reform and education, is now extending that vision to technology,” Vijayan said. The plan includes new initiatives, such as the Kerala Semiconductor Mission, the AI Mission and the Future Technology Mission, to drive innovation and employment. Seeram Sambasiva Rao, the special IT secretary for Kerala, emphasized the importance of emerging sectors, as well as the need for missions to fast track the developments.

Professor Alex James, director of the Indian Institute of Information Technology and Management-Kerala, as well as Dean at The Kerala University of Digital Sciences, Innovation and Technology (Digital University Kerala), said the state’s draft semiconductor policy would prioritize product development, ease of innovation and multidisciplinary collaboration. “Analog, RF and mixed-signal design and development align best with Kerala’s strengths and resource constraints,” James said.

Industry experts present at the event wholeheartedly expressed their support for the new policy framework, adding that the state’s strength lies in design rather than fabrication. “Chasing foundry capacity may not be the best approach,” said P.V.G. Menon, an industry expert and the former president of the India Electronics and Semiconductor Association.

A 28-nm fab, Menon noted, costs approximately $11 billion and consumes enormous resources. “Instead of spending billions on bricks and water and considering the sensitive ecology of the state, Kerala should rather invest in design, testing, and product certification facilities,” he added.

Menon urged the state to utilize its strong academic base to build design-centric clusters and to expand Maker Village 2.0, which will include new hardware incubation centers across the cities of Wayanad, Kannur, Palakkad, Alappuzha, Thrissur and Kottayam. “This is an era of competitive federalism,” he added. “Kerala already has the talent and policy depth. It just needs to tell its story better.”

Professor Rajesh Zele of IIT Bombay, who earlier led design teams at MaxLinear, called the current phase the “hockey-stick point” of India’s semiconductor journey, driven by the global chip shortage wake-up call. He acknowledged the long pauses in India’s semiconductor efforts but stressed on retaining the IP within the country as the way to go forward. “Nearly 20% of the world’s design engineers are based in India. We design 3,000 chips a year, but the ownership leaves India. The answer lies in building chips in India, for India,” he said.

That effort is already visible in public R&D. Libin T. T., a scientist at C-DAC Thiruvananthapuram, said the agency has developed a series of VEGA processors (32- and 64-bit chips on 180-nm and 28-nm nodes) and is now moving to 7 nm. “All our SoCs are designed in India; only fabrication happens abroad,” he said. Under MeitY’s Chips-to-Startup program, CDAC is currently engaged in 91 projects with 88 startups and over 2,000 institutions.

Kerala, he added, could play a larger role by aligning its semiconductor mission with C-DAC’s design ecosystem and offering local prototyping support. “The pieces are in place,” he said. “What’s needed is coordination between academia, startups and government.”

The design-led vision is not just confined to the public sector but the private sector, as well. Rijin John, CEO of Silizium Circuits, showcased a communication chip “designed, architected and laid out entirely in Kerala.” He said the project demonstrates that fabless product design can thrive locally if startups, research institutions and government programs work in tandem. “The ecosystem exists. The challenge is to use it effectively,” John said.

While digital design dominates the conversation, Kerala could carve an early advantage in analog, power and MEMS devices, according to Yogan Senthilkumar, CTO of iVP Semiconductors. “MEMS fabrication is far less capital-intensive than CMOS,” Senthilkumar noted. “Automotive-grade mixed-signal and sensor chips are realistic targets that can bring investors here.”

He also pointed to gaps in India’s supply chain—probe-card and test-socket manufacturing, for instance—that could become opportunities for smaller players in the state’s industrial clusters.

Talent, however, remains the critical enabler. Sankalp Singh, University program manager at Synopsys, said access to EDA tools has expanded rapidly through government schemes, with Kerala ranking second nationwide in institutional participation. “EDA isn’t just software. It’s the backbone that lets startups build chips faster and cheaper,” Singh said.

Singh was part of the consulting team that developed the new All India Council for Technical Education VLSI curriculum, which introduces seven semiconductor verticals across disciplines. “We need every lab producing 200 engineers, not just one,” he said. “Semiconductors now span silicon, systems and software. Whatever your background, there is a role for you.”

Kerala’s approach indicates a broader shift in India’s semiconductor ambitions, switching from chasing fabrication megaprojects to building IP and design capability. With its strong academic ecosystem, affordable talent and expanding startup network, the state aims to anchor the “brain” end of the chip value chain.

As Menon summed it up, “Kerala doesn’t need to build the next Taiwan. It needs to build the next great idea that powers it.”

By: DocMemory
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