What's Happening?
India is making strides in the global semiconductor race with the development of its first commercial chip foundry for mature semiconductors in Gujarat. The $11 billion project, supported by Prime Minister
Narendra Modi's $10 billion semiconductor program, aims to position India as an alternative manufacturing hub. The foundry, a joint venture between Tata Group and Taiwan's Powerchip Semiconductor Manufacturing Corporation, has attracted interest from US semiconductor giant Intel. The initiative focuses on mature chips used in cars, appliances, and industrial equipment, offering a practical entry point for India's semiconductor ambitions.
Why It's Important?
India's entry into semiconductor manufacturing is significant for strengthening its role in global supply chains and reducing reliance on imports. The focus on mature chip technology provides a practical starting point for India, allowing it to build capabilities and attract foreign investment. The initiative supports domestic demand, which is expected to double by 2030, and enhances industries reliant on semiconductors. However, India still lags behind major players in advanced chip technology, highlighting the need for sustained policy support and infrastructure development.
What's Next?
India's semiconductor push is expected to continue with the development of assembly, testing, and packaging projects, supported by government incentives. The Tata-PSMC foundry could become operational by late 2026, marking a turning point for India's semiconductor ambitions. Continued collaboration with global partners and expansion of research and development incentives will be crucial for scaling up and catching up with established leaders in the industry.
Beyond the Headlines
India's semiconductor initiative highlights the importance of strategic partnerships and long-term policy precision in building technological capabilities. It underscores the need for countries to diversify production and strengthen supply chains to enhance global competitiveness. This development could serve as a model for other nations looking to enter the semiconductor industry.
