Is India entering a chip production red ocean?
- The intense fight for semiconductor investments among various countries has raised concerns that it will eventually turn into a price war. But demand for chips may outweigh those concerns
The global semiconductor industry is prone to shortages and surpluses. Shortages drive capital investments. During such phases, chipmakers expand production capacity, leading to oversupply. Now, it’s a time of glut, but India is entering the manufacturing fray with a $10-billion incentive package for the semiconductor industry. This raises the question of whether it should get into the ‘red ocean’ of chip manufacturing, marked by intense competition, or focus on chip design.