Chip challenge

INDIA is nurturing the grand ambition of becoming a global hub of semiconductor manufacturing. The ongoing Semicon India 2024 conference in Greater Noida is showcasing the country’s semiconductor strategy and policy. PM Narendra Modi’s catchy remark — ‘the chips are never down in India’ — is an open invitation to industry stakeholders to make big-ticket investments here. Indeed, India’s growth story is worth betting on, but the government’s sustained support will be required to fulfil the PM’s promise of providing an integrated ecosystem to international players.

It is no exaggeration to say that semiconductors power the contemporary world. Chips are everywhere — be it smartphones, cars, washing machines, pacemakers or aeroplanes. That’s why this is a highly competitive field. Taiwan, which is home to thousands of semiconductor-related companies and has a robust end-to-end supply chain, is the global numero uno. Among the other leading nations are South Korea, Japan, the US and China. The Covid-19 pandemic slowed down the manufacture of semiconductors, particularly in Taiwan and China. Amid these large-scale disruptions, India got its foot in the door by launching the ISM (India Semiconductor Mission) in 2021. A critical lesson from the pandemic was that the global supply chain should be diversified.

India is eyeing a bigger piece of the pie, but the road ahead is going to be anything but easy. Even as Asian nations are wooing investors with incentives, the US is projected to triple its domestic semiconductor manufacturing capacity by 2032, a decade after the CHIPS and Science Act was enacted. Beyond the optimism and hyperbole, India needs to set clear-cut timelines for achieving its goals. Ease of doing business holds the key to attracting long-term investments. India’s semiconductor ecosystem is no doubt at an early stage, and there should be no reluctance to learn from other countries’ experience.