In a significant stride towards self-reliance in the semiconductor industry, India aims to produce its first indigenously manufactured semiconductor chips by December 2024. Union Minister Ashwini Vaishnaw recently announced this ambitious plan, marking a crucial milestone in India’s journey towards bolstering its domestic chip manufacturing capabilities. With this development, India seeks to reduce its dependence on imported chips and establish a robust semiconductor ecosystem within the country.
According to the minister, it is anticipated that four to five semiconductor plants will be built in the nation within a year, and Micron Technologies’ $2.75 billion plant will also contribute 200 smaller units to the ecosystem. While briefing the media following the joint statement issued by US President Joe Biden and Prime Minister Modi, during his visit to the US, Vaishaw said, “First Made-in-India chip from Micron is expected to come out in about six quarters from now.” He also mentioned that the turnover of this project at full capacity will be billion dollars.
Micron, a manufacturer of computer storage chips, will invest a total of $2.75 billion (roughly 22,540 crores) in Gujarat to build its semiconductor assembly and test facility. The company will contribute $825 million towards the plant’s total cost, with the government covering the remaining sum in two instalments. The building will likely start going up in phases in 2023. Phase 1’s 5,00,000 square feet of clean room space is expected to be operational by the end of 2024.
Implications for India
Reducing Dependency
The advent of locally produced semiconductor chips will significantly decrease India’s reliance on imported chips, which currently account for a substantial portion of the country’s demand. By developing its own chip manufacturing capabilities, India aims to enhance its strategic autonomy and reduce vulnerabilities arising from supply chain disruptions or geopolitical factors affecting chip imports.
Boosting Electronics Manufacturing
The production of indigenous semiconductor chips will provide a significant boost to India’s electronics manufacturing sector. With a growing consumer base and increasing demand for electronics, such as smartphones, tablets, and IoT devices, this development will strengthen the foundation of India’s electronics industry. By fostering domestic chip manufacturing, India can attract investments, create job opportunities, and position itself as a global hub for electronics manufacturing.
Encouraging Research and Development
The initiative to manufacture semiconductor chips in India will spur research and development activities in the field of chip design and fabrication. It will foster collaboration between academia, research institutions, and industry players, leading to advancements in semiconductor technology. This drive towards innovation will not only benefit chip manufacturing but also contribute to technological progress in various sectors, such as telecommunications, healthcare, automotive, and defence.
Enabling Technological Advancements
Indigenous chip manufacturing holds the potential to unleash a wave of technological advancements in India. It will pave the way for the development of cutting-edge solutions tailored to address specific needs and challenges faced by the country. By having control over the entire chip manufacturing process, India can customize chips for applications like artificial intelligence, machine learning, data centers, and 5G networks, thus fostering innovation and driving digital transformation across sectors.
Collaboration and Investment Opportunities
The journey towards indigenous chip manufacturing requires collaboration between the government, industry players, and global technology partners. The government’s support in terms of policy frameworks, incentives, and infrastructure development will be instrumental in attracting investments from both domestic and international semiconductor companies. Partnerships with leading chip manufacturers and technology giants can accelerate knowledge transfer and skill development, further strengthening India’s position in the global semiconductor landscape.
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