India’s semiconductor moment is bigger than outsourcing: UST COO Gilroy Mathew

In the evolving landscape of technology, discussions around artificial intelligence (AI) are prevalent, yet the true battleground for future dominance lies in the semiconductor sector, asserts Gilroy Mathew, COO of UST, a firm specializing in AI and tech solutions. As nations and tech giants race to secure semiconductor supply chains amidst soaring demand for advanced computing and AI infrastructure, Mathew emphasizes that control over chips will shape the economic and strategic dynamics of the upcoming technological era. "Silicon control increasingly dictates the efficiency, scalability, and economic viability of AI systems, making semiconductors a crucial strategic asset in the broader tech ecosystem," Mathew stated in an interview with Business Today. He added that semiconductors and AI are not in competition but are interdependent components of a unified technology framework. For India, the semiconductor opportunity stands apart from past tech trends such as outsourcing or cloud computing. Mathew explains, "This isn’t just a service opportunity; it represents a chance for strategic manufacturing, design, and national capability development." UST's journey in the semiconductor space illustrates this shift. Since its entry into the sector in 2009 with a modest engineering team, the company has significantly expanded its capabilities, notably acquiring SeviTech Systems in 2018 to bolster its pre-silicon design skills. By 2023-24, UST was engaged with 35 of the world's leading semiconductor firms, covering the entire silicon lifecycle—from design and validation to embedded software development. In a major commitment to India's semiconductor goals, UST partnered with Kaynes Semicon in late 2025 to establish a Rs 3,330 crore Outsourced Semiconductor Assembly and Test (OSAT) facility in Gujarat. Mathew indicates that the next growth phase for Indian engineering and IT services firms will involve a shift from providing talent support to owning larger semiconductor projects. "Currently, many Indian firms excel in delivering skilled talent for specific tasks like validation and testing, but the global industry is seeking partners capable of managing extensive engineering programs and delivering measurable outcomes," he remarked. While semiconductor fabrication remains a long-term goal due to its capital-intensive nature, Mathew sees immediate potential in chip design, advanced packaging, and embedded systems. With nearly 20% of the world’s chip design engineers based in India, the nation boasts a solid foundation for design talent. Furthermore, policy initiatives like the India Semiconductor Mission are transitioning from plans to actionable projects, with government incentives and private investments beginning to flow. However, Mathew cautions against falling into the trap of competing solely on cost and scale. "India should not aim to control every aspect of the semiconductor value chain at once. Instead, we must foster trust, develop specialized expertise, and maintain high-quality standards to achieve long-term success," he advised. Historically, Indian IT services companies have gained global prominence during significant technological transitions, yet much of the intellectual property has remained with international firms. Mathew believes that the semiconductor sector presents India with a chance to reclaim some of that value. He points out, "In previous tech shifts, while Indian companies scaled rapidly, the core intellectual property often stayed with foreign product companies. With semiconductors, we have an opportunity to redefine this landscape." The implications of semiconductors extend beyond just technology; they are vital for economic growth, national security, and resilience across various sectors, including healthcare and automotive. UST’s investment in Kaynes Semicon underlines the necessity for ecosystem collaborations to establish a sustainable semiconductor presence in India. Nonetheless, Mathew stresses that leadership in this field cannot be achieved overnight. "Building a semiconductor ecosystem demands decades of expertise, trust, and continuous investment," he concluded. As UST embraces the semiconductor revolution, Mathew anticipates that AI-driven automation will also transform parts of the IT services industry. He warns that sectors reliant on repetitive tasks are most at risk of automation over the next five years. The real opportunity for India lies in merging its software prowess with semiconductor capabilities, potentially positioning the country as a global leader in creating integrated solutions combining hardware, embedded software, and cloud technologies.