| “When the chips are down, count on India,” Prime Minister Modi said at a semiconductor conference this week. Three chip projects are slated to start pilot production this year, emphasizing the country’s entry into the global chip battle — dominated by tricky neighbors and fickle friends. India’s four-year-old mission to develop a local semiconductor industry is gaining momentum, suggests government data. To date, there are 10 semiconductor projects; $18 billion in investment commitments; subsidies of over $7 allocated; 23 chip design projects sanctioned; a new semiconductor-led technical education curriculum, and over 60,000 students under various training programs. At the Semicon conference in New Delhi this week, top executives from chip majors AMD, Applied Materials, ASML, Tokyo Electron, Infineon and LAM Research expressed interest to partner with India, Bloomberg’s South Asia Tech Correspondent Sankalp Phartiyal said to me. But, as Phartiyal reports, no major firms have committed big investments in Indian chip manufacturing so far, barring Taiwan’s PSMC, which has partnered with the Tata Group to produce 28 nanometer chips. It was the only fab project underway until private company SiCSem and an HCL-Foxconn joint venture announced their plans recently. The remaining facilities, including Micron’s, pertain largely to assembly, testing, marking and packaging. That’s prompted criticism that India’s semiconductor push is limited to less advanced chips and processes. Ashok Chandak disagrees. These are establishing moves, said the president of industry bodies Semi India and IESA. India has gone from virtually zero presence in the chip ecosystem to 10 projects in diverse technologies including recently announced ventures for a compound fab and advanced electronic packaging, he said. The 28 to 110 nm chips to be manufactured or assembled and packaged in India will serve consumer and power electronics, automobiles, computing and data storage and wireless communication among others, and will be sold locally as well as exported. That’s a $400 billion market opportunity in an estimated $1 trillion global semiconductor industry by 2030, Chandak said. But to claim any meaningful part of that market, India needs to build the semiconductor ecosystem – including many chip design ventures, vendors of chemicals, gases, wires and other ancillaries, manufacturing technology investments and skilled labor for factories. It will take precision and purity in materials and process. “We cannot be perpetually dependent on the overseas collaborator for technology transfer and training, we must build our own in the next three to five years,” Chandak said. India has one advantage in the global chip race — Indians. At Nvidia, the world’s most valuable company, a third of the engineers and senior leadership are Indians. “India designs Nvidia’s chips,” CEO Jensen Huang said in an interview to Economic Times last year. The Indian diaspora could also help global customers overcome concerns over working with new Indian chipmakers. Most of these global companies have Indians in the top three or four positions and they can carry our message, said Vellayan Subbiah, chairman of CG Power — which just launched a pilot Outsourced Semiconductor Assembly and Test facility — to the Hindu Business Line. The Chinese diaspora really supported the building of China, and this is going to be very important for the building of India as well, Subbiah said. Another benefit is government incentives for chip manufacturing and design. Some projects will receive capital subsidies of close to 70% from center and state governments. Yet India’s $8.6 billion semiconductor fund pales against the $52 billion provided under the US Chips Act. A new complexity is President Donald Trump’s demand for equity in exchange for incentives. The US government now owns just under 10% of Intel, giving it influence over the company’s investment plans. Just last year the US wanted to build a fab in India. Now Trump’s threatening tariffs on semiconductor imports, making it tougher for India to draw mega investments from chip majors. Ironically, this growing weaponization of the semiconductor supply chain underscores the urgency of Modi’s make-in-India mission. Chandak said the goal is to become a salient player that imports as well as exports semiconductors, creating interdependence with other manufacturing countries to preclude any geopolitical arm twisting. It will be twice as hard, but India is hoping to repeat its iPhone manufacturing success in the semiconductor industry. | 
