India's chip strategy makes progress with US$ 21 billion in proposals
- IBEF
- February 27, 2024
The Indian government is now tasked with evaluating semiconductor proposals totaling US$ 21 billion, deciding on taxpayer support for foreign chipmakers, local players, or a hybrid approach. Tower Semiconductor Ltd. from Israel proposes a US$ 9 billion plant, while Tata Group in India suggests a US$ 8 billion chip fabrication unit, both located in Prime Minister, Mr. Narendra Modi’s home state of Gujarat. As the semiconductor industry becomes a critical geopolitical arena, Prime Minister, Mr. Narendra Modi’s vision for India as a global manufacturing hub includes luring international chipmakers to reduce import dependence and bolster the burgeoning smartphone assembly sector. Under India’s chipmaking incentive plan, the government would cover half the cost of approved projects, with an initial budget of US$ 10 billion.
Despite previous challenges, including a failed partnership between Vedanta Resources Ltd. and Foxconn Technology Group, the Prime Minister, Mr. Narendra Modi’s administration's financial incentives have supported the efforts of companies like Apple Inc. and Micron Technology Inc. Tower Semiconductor aims to establish the first major semiconductor fabrication unit in India, producing 80,000 silicon wafers per month. Tata Group, eyeing a significant investment in high-tech businesses, plans to partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for its project. A government-approved $3 billion chip-packaging plant is also in the works for eastern India. These initiatives align with Modi's strategy to position India as a reliable tech center, leveraging the country's geopolitical standing to become an indispensable partner for global tech ambitions, particularly amid the ongoing US-China tensions.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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