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"science and technology innovation board daily" september 14th on the wall of the new delhi office of ashwini vaishnaw, india's minister of electronics and information technology, a 12-inch semiconductor silicon wafer reflects light, and hanging next to it is a portrait of indian prime minister narendra modi.

at this week's semicon india, india has rolled out the red carpet for chip manufacturers from around the world and its own "chip dream".

just like the wall of the office of the minister of electronics and information technology of india, if you search for "semiconindia" on the internet, most of the top image search results are promotional photos of the conference with modi's photo hanging on them, which is enough to show the importance india attaches to this conference and the entire semiconductor industry.

modi also attended the conference in person. in his keynote speech, he said that india is working hard to attract more chip companies andthe plan is to increase the size of india's electronics industry to $500 billion by 2030 - currently, the figure is around $155 billion.

"our dream is that every device in the world will have a chip made in india...india will do its best to become a chip power."

it was also at this expo that chip industry executives revealed their investment plans in india. for example, kurt sievers, ceo of dutch automotive chip maker nxp, said that it plans to invest more than $1 billion in india in the next few years to expand its r&d capabilities in india.

▌becoming one of the top five semiconductor manufacturers in the world by 2030?

the last time indian chips went viral was because of the “cow dung chip” in 2020.

india, which regards cows as gods, developed a "new function" for cow dung at that time: the national cattle commission (rka) under the indian government claimed that putting cow dung chips in mobile phones can "substantially reduce radiation" and protect people from diseases. in order to deepen the concept of "made in india" and resist foreign products, the indian government launched local products such as "cow dung chips", which retail for about 50 to 100 indian rupees.

figure | "cow dung chip"

this seemingly "onion news" was actually an official announcement, which attracted great attention online at the time. compared with the "cow dung chip", this time the indian government is "serious" about the chip.

modi has repeatedly stressed the need to "go all out" to develop semiconductors during his tenure.the goal is to bring india into the ranks of the world's top five semiconductor manufacturers by 2030.

from the "semiconductor and display manufacturing ecosystem development plan" with a budget expenditure of up to 760 billion rupees (about 9.06 billion us dollars) in 2021, which attempts to build a "strong semiconductor ecosystem" for india, to the "indian semiconductor mission project" and "semiconductor manufacturing support program (semicon india programme)" established in 2022, to the "indian ai mission" passed in march 2024, the world's most populous country has set its sights on the "big cake" of semiconductors.

▌there are many brave men when there is a big reward

even in the global context, india's semiconductor investment subsidies can be described as "generous":the central government matches 50%, and the relevant state governments match 20% to 25%. the overall government incentive ratio exceeds 70%, and enterprises only need to bear the remaining part.

india just finalized a new semiconductor project on september 2: a proposal by indian local company kaynes semicon to build a semiconductor manufacturing plant in gujarat. it is reported that the new plant will invest 33 billion rupees (about 393 million us dollars) and will have a daily production capacity of 6 million chips after completion, which can be used in industries such as automobiles, electric vehicles, and consumer electronics.

prior to this, several semiconductor projects have been approved:

for example, in june 2023, the indian cabinet approved the first proposal to set up a semiconductor department in sanand, gujarat; and in february 2024, it approved three semiconductor factories in succession: tata electronics’ two factories in gujarat and assam, and cg power’s semiconductor factory in gujarat.

according to the indian government, the construction of these four semiconductor factories is progressing rapidly, which will bring a total investment of nearly 1.5 billion rupees, and the cumulative production capacity can reach 70 million chips per day.

in addition, micron's semiconductor project in sanand, gujarat, has also been approved in june 2023. the plant covers assembly, testing, marking and packaging, with a total investment of us$2.75 billion, of which micron has pledged to invest us$825 million, and the rest will be subsidized by the indian state and central governments. it is expected that the first batch of chips will be supplied in 2025.

earlier this month, israel's hightower semiconductor also planned to cooperate with indian billionaire gautam adani to invest $10 billion to build a manufacturing plant in western india.

l&t group (larsen & toubro) plans to invest more than $300 million to establish a fab-less chip company responsible for designing and selling chips. sandeep kumar, head of l&t semiconductor technology, revealed in an interview that the company plans to design 15 products by the end of this year and start selling them in 2027.

▌“ai mission”

of course, india has not missed out on the hottest ai chips right now.

india’s small and medium-sized companies are working to forge partnerships with other small and medium-sized companies, cloud service providers and large enterprises, hoping to form alliances that will give them entry into the government’s 100 billion rupee ($1.191 billion) gpu tender.

the gpu tender here refers to india's "india ai mission", which aims to establish a comprehensive ecosystem to promote ai innovation through policy planning and cross-public and private sector partnerships.

according to the gpu procurement bidding requirements of the "indian ai mission", the bidder must have installed or placed an order for at least 1,000 gpus; the average annual turnover of the bidder or the main member of the alliance must exceed 100 million rupees in the past three fiscal years, and the turnover threshold for non-main members is 50 million rupees; and there must be at least one partner in the alliance whose average annual revenue from cloud operations in the past three fiscal years exceeded 50 million rupees.

some small companies cannot meet all the requirements and are therefore looking to form a consortium, while some large companies are looking for local partners/specialized companies in related fields, hoping to cooperate.

the economic times, an indian media under the times group, said:nvidia, microsoft, tata communications, indian data center operator stt gdc, indian cloud infrastructure provider e2e networks and others are seeking partnersseveral of them have participated in the pre-bid meeting held by the ministry of electronics and information technology in the last week of august. others, such as dell, will participate in the bid through their partners.

▌"made in india" is difficult to make

when talking about india's ambitions, ashwini vaishnaw, india's minister of electronics and information technology, likes to use apple as an example. "ten years ago, electronics manufacturing in india was almost negligible. today, the electronics manufacturing industry is worth $110 billion... apple alone employs 100,000 people."

the iphone 16 series, which has just been launched for sale, is partly "made in india". according to media reports, the assembly lines in india are not only assembling entry-level iphone 16s, but have also taken orders for some pro models.

however, ivan lam, an analyst at counterpoint research, pointed out thatover the next few years, growth in india will be limited primarily to final product assembly. production of more valuable electronic and mechanical components will remain concentrated in china.although india has made some progress, its efficiency, infrastructure and talent pool cannot yet match china's.

the poor business environment is also a problem for the development of india's semiconductor industry.

hardware capabilities have always been india's shortcoming. for many years, the proportion of manufacturing in india's gdp has remained stagnant, and it is difficult to compare with several major emerging economies in asia such as indonesia and malaysia.

this has resulted in india's failure to build a complete and mature industrial chain, and its dependence on imports of core components remains at a high level, even in the electronics industry which is now performing well with policy support.haitong securities pointed out that although india's import demand for mobile phone complete machines has been greatly reduced, the local area lacks production supporting capabilities such as components and molds. in 2022, india's imports of electronic-related products reached us$77.3 billion, second only to crude oil, which has the largest import scale.

the washington post pointed out more directly that the so-called "made in india" has an increasing amount of "chinese content". as india has expanded the production of smartphones, solar panels and medicines in recent years, the country's dependence on chinese imports has further increased. according to data from the confederation of indian industry, nearly two-thirds of india's electronic component imports come from china, including circuit boards, batteries, etc. gtri also stated that such imports from china have tripled in the past five years.

the industrial chain is incomplete and infrastructure is also a challenge. according to reports, many semiconductor manufacturers or wafer fab companies are still reluctant to invest in india due to concerns about india's infrastructure such as water supply and electricity. india's share of the chip equipment market is less than 1%, far behind china's 34%.

“there is no better time to enter india than now, in 21st century india, opportunities never falter."modi made a bold statement at the indian semiconductor expo. however, the semiconductor industry, and even the entire electronics industry, is full of adventures on the top of the technology mountain, and requires the art of cost control. two years after the release of the us chips and science act, no chip has been produced. whether india's "chip dream" will be in vain remains to be verified by time.