Success with chips will take much more effort
SummaryIndia’s pitch as a trusted partner for global semiconductor makers and offer of financial incentives could yet be queered by the geopolitical context. We’ll have to do plenty ourselves
Data may or may not be ‘the new oil,’ but advanced microchips for digital devices are in geopolitical focus as the Indo-Pacific witnesses a contest of glares between China and the West over Taiwan, whose grip on the manufacture of these prized inputs has pushed both sides into a race for supply security. Globally, cutting-edge semiconductors are seen to underlie the current path of tech evolution. India’s effort to break into this field has faced setbacks like a proposed Foxconn-Vedanta venture coming apart, but Prime Minister Narendra Modi has signalled the government’s determination. At the Semicon India 2023 conclave held in Gandhinagar last week, he indicated that firms could get 50% financial backing to set up the desired facilities in the country. Apart from policy enablers and our tech talent, Modi referred to the covid pandemic and Ukraine war in his pitch to global investors. “The world needs a trusted, reliable chip supplier," he said, “What can be better than the largest democracy in the world?" This, he added, “is the right time for India and for the world." US-based companies have been lured; AMD said it plans to invest $400 million in an R&D centre here, while Micron has a $825-million plan for local chip assembly, testing and packaging. This conforms with New Delhi’s strategy of offering India as a reliable partner for the West to cover its supply risks. Yet, it remains unclear if India has any chance of becoming a chip player of global significance.