- Indian administration has already approved investments exceeding $15b in semiconductor initiatives.
In a significant address at a chip conference on the outskirts of New Delhi, Prime Minister Narendra Modi articulated a bold vision for India’s technological future, asserting the nation’s ambition to elevate its electronics sector to a staggering $500 billion by the end of the decade.
The proclamation underscores India’s strategic intent to position itself as a global hub for semiconductor manufacturing, a critical component in an increasingly digital and interconnected world.
Currently, India’s electronics market is valued at approximately $155 billion, presenting a substantial opportunity for growth.
Modi′s government is actively courting chipmakers, emulating successful strategies that have attracted major players like Apple Inc., which has committed to assembling $14 billion worth of iPhones in India.
The Indian administration has already approved investments exceeding $15 billion in semiconductor initiatives, signaling a robust commitment to fostering this vital sector.
Geopolitical tensions
Notable projects include TataGroup′s proposal for the country′s first significant chip manufacturing plant and Micron Technology Inc.′s planned $2.75 billion assembly facility in Gujarat, Modi’s home state.
Additionally, Israel’s Tower Semiconductor Ltd. is exploring a partnership with billionaire Gautam Adani to establish a $10 billion fabrication plant in western India.
The urgency of expanding semiconductor production capabilities in India cannot be overstated, particularly in light of the geopolitical tensions between major global powers, notably the United States and China.
Nations seek to mitigate their dependence on foreign suppliers, especially from regions like China and Taiwan, the demand for domestic chip production has surged.
‘Right time to be in India’
Countries such as the United States, Germany, Japan, and Singapore are investing heavily to bolster their own semiconductor industries, recognising that these components are foundational to a wide array of technologies, from artificial intelligence to electric vehicles.
To facilitate this transformation, Modi said that the government has committed to providing substantial financial incentives, offering up to 50 per cent support for the establishment of semiconductor manufacturing facilities.
Such a strategic investment reflects a comprehensive understanding of the industry’s potential to foster innovation, create jobs, and enhance the nation’s technological infrastructure.
Furthermore, the collaboration with state governments underscores the importance of a unified approach, bringing together resources and expertise to achieve common goals.
By aiming for 100 per cent electronic manufacturing within the country, Modi said that India not only seeks to reduce its dependency on imports but also aims to create a robust ecosystem that can stimulate growth across multiple sectors.
“Our dream is that every device in the world will have an Indian-made chip and 100 per cent of electronic manufacturing should happen in the country,” Modi said.
Modi’s assertion that “this is the right time to be in India” reflects a broader sentiment that the country is on the cusp of a technological renaissance.
The Prime Minister’s confidence is echoed by industry leaders, including NXP Semiconductors NV CEO Kurt Sievers, who announced plans for over $1 billion in investments aimed at enhancing research and development efforts in India.
Such commitments not only validate the government’s initiatives but also highlight the potential for India to emerge as a key player in the global semiconductor landscape.
Meanwhile, Ajit Manocha, the President and CEO of SEMI, has articulated a vision for India that underscores its potential to emerge as a leading semiconductor powerhouse in Asia.
The optimistic outlook is predicated on the confluence of several pivotal factors that are now aligning to foster a robust ecosystem for semiconductor growth, not only within the nation but also on a global scale.
The burgeoning demand for semiconductors, particularly driven by advancements in artificial intelligence (AI), necessitates substantial investment in manufacturing capabilities.
150 new fabs needed
Manocha highlights that to meet the industry’s ambitious target of achieving a market valuation of $1 trillion by 2030, approximately 150 new semiconductor fabrication plants, or fabs, will be essential.
This underscores a critical juncture for India, which must accelerate its growth trajectory to capture an equitable share of this expanding market.
In response to this demand, India is poised to make significant strides with the establishment of five new semiconductor manufacturing facilities, backed by an impressive investment exceeding Rs1.52 trillion.
The investment not only signifies confidence in India’s manufacturing capabilities but also reflects a strategic commitment to cultivating a semiconductor ecosystem that can support both local and global technological advancements.
By fostering collaboration among industry stakeholders and promoting investment, India stands to enhance its position in the global semiconductor landscape.
As Manocha aptly notes, the stars are aligning, setting the stage for India to realise its ambition of becoming a key player in the semiconductor industry.