India’s Semiconductor Dream to be Next Chip Manufacturing Hub

India’s Semiconductor Dream

India’s semiconductor dream and efforts have captured global attention in recent years, emerging as a potential alternative to China in the supply chain dynamics of the chip industry. With significant investments and strategic policies, India appears poised to carve its niche in the global semiconductor landscape. Semiconductors are the backbone of modern technology, powering everything from smartphones and laptops to automobiles and military systems.

• The country's aspirations to become a major player in the semiconductor manufacturing are gaining significant momentum, with over USD 18 billion in investments already underway.
• These investments are spread across five key projects, including Tata Electronics' USD 11 billion chip fab with Taiwan's PSMC, set to begin operations in 2026.
• In Financial Year (FY) 2024, India's electronics imports reached USD 60 billion, making up 25 per cent of the country's trade deficit, second only to oil. This has prompted the Indian government to take a bold stance on domestic electronics manufacturing, focusing on boosting production and reducing the import dependency.
• The government's significant policy push includes a USD 10 billion incentive program launched in 2021, aimed at covering around 50 per cent of the project costs for chip and display fabs, as well as testing facilities.
• Five semiconductor-related projects, involving a total investment of USD 18 billion, are under construction. These projects are expected to create around 80,000 direct and indirect jobs, contributing to the growth of India's semiconductor dream and ecosystem.
• India's semiconductor industry is still in the early stages, and it is strategically leveraging proven technologies rather than aiming to compete with the world's most advanced nodes. This approach mirrors the success India has seen in the automotive industry.
• National initiatives, such as the Semiconductor India Programme and the India Semiconductor Mission (ISM), are focused on capturing a significant share of the global market, driving innovation, and stimulating economic growth through job creation and technological advancement.
• Governments' initiatives and investments in semiconductor manufacturing can make India’s semiconductor dream to be the the next chip manufacturing hub a reality.