India lures chip firms in bid to become global semiconductor giant

India is encouraging investment into the nation's semiconductor manufacturing sector in a bid to become a key force to rival the US and Taiwan.

The country’s aim is to establish India as one of the key partners in global semiconductor supply chains, prime minister Narendra Modi said at India's first semiconductor conference, hosted in Bengaluru.

Modi emphasised that companies investing in semiconductors could count on government support. This includes the recently announced Semicon India Programme which has made $10 billion available and received $20.5 billion in investment proposals from five companies in February. The programme provides financial support to companies investing in semiconductors, display manufacturing, and design ecosystems.

The PM underlined the country is also investing heavily in skilling and training young Indians for the needs of the 21st century.

“We have an exceptional semiconductor design talent pool which makes up to 20% of the world’s semiconductor design engineers. Almost all of the top 25 semiconductor design companies have their design or R&D centres in our country”, he added.

He also described how the country is building a digital infrastructure to connect over 1.3 billion Indians as well as connecting six hundred thousand villages with broadband investment.

India’s own consumption of semiconductors is expected to cross $80 billion by 2026 and $110 billion by 2030, said Modi. He added the country is ready to seize new opportunities, especially given a new world order is forming.

“We have worked hard over the last few years to create an environment that encourages growth. India has an appetite for tech and risk-taking. We have put the odds in your favour as far as possible through a supportive policy environment. We have shown that India means business,” said Modi.

A number of countries around the world are eager to attract chipmakers to their territory, an objective fuelled by the current chip crisis as well as semiconductors becoming increasingly more important. For example, the European Commission proposed a €43 billion European Chips Act in February to reduce its reliance on foreign supply chains of these components.

In June, Japan also wanted to attract foreign semiconductor companies through financial incentives, with one government official saying these components are now as important as food or energy. Through this initiative, TSMC and Sony partnered to build a $7 billion chip plant in Japan in November.