India must attract a more diverse range of semiconductor suppliers to establish a strong chip industry, according to Ajit Manocha, president and CEO of the trade group SEMI. “They need to really increase the emphasis on the ecosystem because, without an ecosystem, growth will be limited,” Manocha stated in a recent interview. He emphasized the importance of encouraging smaller and medium-sized companies to set up operations in India.
Global Investments in Semiconductor Supply
Governments worldwide are heavily investing in domestic semiconductor supplies, which are crucial for products ranging from smartphones to artificial intelligence systems. India’s efforts are ambitious, considering the established advantages of countries like the US, China, and Malaysia.
India’s $10 Billion Initiative
Indian Prime Minister Narendra Modi has launched a $10 billion fund aimed at attracting global chipmakers, such as Taiwan Semiconductor Manufacturing Co. (TSMC), a leading supplier for companies like Apple and Nvidia. Manocha believes that if Modi secures a third term, the initiative could expand beyond the initial $10 billion to foster a comprehensive ecosystem.
Infrastructure Challenges and Major Projects
Despite the financial incentives, no major semiconductor firms have yet committed to substantial investments in India, partly due to infrastructure challenges like a reliable power supply. However, there are notable projects underway, including an $11 billion site by the Tata Group in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for mature chip production, and a $2.75 billion assembly and testing facility by US-based Micron Technology Inc.
Importance of Smaller Companies
Smaller companies play a crucial role in the semiconductor ecosystem, as evidenced by TSMC’s strategy in the US, where it has committed to building three advanced chip plants. The Taiwanese company has facilitated the establishment of numerous vendors in Arizona to support its operations.
Optimism for India’s Semiconductor Ambitions
Speaking at the India-Taiwan Semiconductor Forum in Taipei, Manocha expressed optimism about India’s progress. He highlighted that the Tata and Micron projects could serve as catalysts for developing a robust technology foundation in India.