India is betting $18 billion to build a chip powerhouse. Here’s what it means
A robotic machine produces a semiconductor chip at a stop to show investors during the Assam 2.0 investment summit in India on February 25, 2025.
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India wants to be a global chip, but the odds are upright: competition is violent and late in India to make the most advanced chips in the race.
In 2022, when the United States restricted the export of developed AI chips to China to reduce Beijing’s access to the latest technology, a global race began for semiconductor self -confidence.
It offers an opportunity for India: the country wants to reduce dependence on imports, reduce the chips safely for strategic sectors, and to capture a larger share of the global electronic market away from China.
India is one of the largest electronic consumers in the world, but there is no local chip industry and plays a minimum role in the global supply chain. New Delhi’s “semiconductor mission” aims to change it.
Ambition is brave. He wants to create a complete supply chain from design to manufacturing, test and packaging in Indian territory.
As of this month, the country approved 10 semiconductor projects with an investment of 1.6 trillion rupees (18.2 billion dollars). These include two semiconductor manufacturing facilities and multiple tests and packaging factories.
India also has an engineering capability pool that is already employed by global chip design companies.
Nevertheless, progress has been irregularly, and neither investments nor talent pool is not enough to make India’s chip ambitions come true.
He needs science and a deep and long -term ecosystem, “India needs more than a few FABS or ATP facilities (ie, more than a few” more than a few bright objects. “) A dynamic and deep and long -term ecosystem.” He said.
Ezell says that leading semiconductor manufacturers think that there were “500 separate factors” before making billions of dollars of Fab investments. These include talent, tax, trade, technology policies, labor rates, laws and customs policies – all areas that India should do.
Yeni Delhi’s Policy Pushing
In May, the Indian government added a new element to the ambition of chip: a plan for a critical bottleneck that supports the production of electronic components.
So far, chipset producers did not have a local demand for their products, because in India, there were almost no electronic components manufacturing companies like phone camera companies.
Researchers at the semiconductor manufacturing laboratory at the Nano Science and Engineering Center at the Indian Science Institute in Bangalore.
Manjunath Kiran | AFP | Getty Images
However, the new policy offers financial support to companies that produce active and passive electronic components and is a potential domestic receiving supplier base that chip manufacturers can add.
In 2022, the country returned from the strategy of providing superior incentives to manufacturing units that make 28nm or less chips. In the case of chips, the smaller the size, the higher the performance with advanced energy efficiency. These chips can be used in new technologies such as advanced AI and quantum information processing by packing more transistors into the same area.
However, this approach did not help India develop the new semiconductor industry, so the new Delhi now includes 50% of the project costs of all manufacturing units, regardless of the chip size, and the chip test and packaging units.
Fab companies from Taiwan and the UK and semiconductor packaging companies from the USA and South Korea showed interest in helping India’s semi -conductive ambitions.
“The Indian government has made generous incentives to attract semiconductor producers to India, Ez Ezell said, but stressed that” such investments are not sustainable forever “.
Long way
The largest chip project in India is currently by Prime Minister Narendra Modi’s Tata Electronics, Taiwan’s Powerchip Semiconductor Manufacturing Corp.
The unit will make chips for power management integrated circuits, screen drivers, microcontrollers and high -performance information processing logic, Tata said electronicAI can be used in automotive, information processing and data storage industries.
The UK’s Clas-SIC WAFRET Fab was also connected to the Sicsem of India to establish the country’s first commercial compound Fab in the eastern province of Odisha.
According to the government press release, these compound semiconductors can be used in missiles, defense equipment, electric vehicles, consumer tools and solar inverters.
“The next 3-4 years is very important to advance India’s semiconductor goals,” PWC is very important, “PWC said.
According to Shetty, the establishment of operational silicone manufacturing plants and overcoming technical and infrastructure barriers beyond the incentives will be an important milestone.
Opportunities beyond Fab
Production areas should meet strict requirements such as being in areas free of floods and vibrations with a reliable road connection that can offer ongoing logistics for some regions.
India also needs special chemical suppliers that meet the “ultra -high purity standards required for advanced semiconductor production”.
Beyond chip manufacturing facilities, many medium -sized companies in India have been interested in establishing chip tests and packaging units. Several Indian groups are also entering the segment, drawn by higher margins and lower capital density compared to Fables.
“Outdoor -based semiconductor installation and test (OSAT) represents an important opportunity for India, but it will be important for continuous growth to clarify market access and demand channels.”
The success in this field will see that India has entered the global chip industry, but the new Delhi is a long way to develop and produce the end of algae technology: 2nm semiconductors.
This 2nm chips offers better performance and power efficiency due to smaller transistor sizes. Taiwan Semiconductor Manufacturing Corporation will launch the last 2nm chips that produce mass producing later this year. According to a FT report.
New Delhı, India – May 14: Union Railways, Information and Publication, Electronics and Information Technology Ashwini Vaishnaw, the media media briefing at the National Media Center on May 14, 2025, India, India.
Hindustan Times | Hindustan Times | Getty Images
Last week, to open a new office of a new semiconductor design firm in Bengaluru, HDA Minister Ashwini Vaishnaw said that the British company will design the most advanced chips used in AI servers, drones, 2 nm mobile phone chips.
However, experts, the role of local capabilities may be limited to non -core design test and verification, because the basic intellectual property of chip designs is often done in places such as the US or Singapore, in which established IP regimes support such activities.
“India has sufficient ability in the field of design, because contrary to the semiconductor production and tests that have emerged in the last 2 years, the design has been there since the 1990s,” Jayanth Bur, a employer with more than 15 years of experience for global semiconductor companies in India. He said.
He said that global companies generally use the “block level” design verification work to India.
It is something that needs to solve if the Indian government wants to fulfill its semi -conductive ambitions.
“India may consider updating IP laws to address new IP forms such as digital content and software. Of course, the improving execution mechanisms will come a long way to protecting IP rights,” Mumbai -based JSA Advocates & Protachors. Says.
“Our competition is not only having strong IP laws, but also with countries like the USA, Europe and Taiwan, a more established ecosystem for chip design.”
