Semiconductor manufacturing: Govt, experts excited but Intel still has no plans

Brushing aside the speculations following Intel CEO Pat Gelsinger’s meeting with Prime Minister Narendra Modi on Wednesday, Intel told Business Today that the company has no definitive plans for manufacturing in India. Intel’s CEO Pat Gelsinger, along with an Intel leadership team, had a meeting with Prime Minister Modi and select senior ministers. The closed-door meeting was joined by Nivruti Rai, Country Head, Intel India, Randhir Thakur, President of Intel Foundry, along with Union ministers like Ashwini Vaishnaw, Rajeev Chandrasekhar, Nitin Gadkari, among others.

While Intel has no definitive plan for manufacturing in India, the Indian government and industry experts are excited about making India a leading hub for semiconductor manufacturing. Union Minister Rajeev Chandrasekhar tweeted “Good meeting yday (yesterday) wth (with) @PGelsinger n @intel team at @GoI_MeitY to discuss @Semicon_India n India's roadmap in Mobility, Tech n Auto Innovation as outlined by @nitin_gadkari @AshwiniVaishnaw @DrJitendraSingh.”

Responding to Business Today’s query on the company’s plans for India’s semiconductor program, Intel said, “Intel India is Intel's largest design center outside of the US and we have been investing towards accelerating innovation and design engineering in India over the last two decades. While we are encouraged to see the Indian government’s commitment to building a regional semiconductor manufacturing ecosystem, we currently have no definitive plans for manufacturing in India.”

Further, the company also shared details about the meeting between the government and Intel’s leadership team with Business Today.

“This is Pat’s first India visit since becoming Intel CEO in 2021. As part of his visit, he met with the Prime Minister of India to discuss Intel’s efforts in the country to accelerate innovation and adoption of key emerging technologies like AI, 5G, and help prepare an AI-ready next-generation workforce through its Digital Readiness programs. Intel reaffirmed its commitment to India and continued collaboration with the relevant ministries on the adoption of key emerging technologies,” said Intel.

Since the day India announced its semiconductor mission on December 15 last year, the government has already received five credible proposals for fabs and had even recently announced the formation of an advisory committee that will steer the objectives in a structured, efficient, and strategic manner.

The industry experts are, however, excited about Gelsinger’s meeting with the government.

Satya Gupta, Advisor, IESA, and President, VLSI Society of India told Business Today: "I am very pleased to see that top leaders of Intel, Pat Gelsinger, Randhir Thakur, Raja Koduri and Nick Mckeown, visited India over last three months. This is very rare and clearly indicates Intel's serious interest in India. For any serious, long-term investment from large company like Intel it takes time and multiple dialogues with the government to create a strategic alignment and a win-win situation."

Similarly, Prabhu Ram, Head- Industry Intelligence Group (IIG), CyberMedia Research, echoes the sentiment. “The wheels are turning slowly and surely for India’s semiconductor program. The meeting between Intel’s leadership team and the Indian government, as such, augurs well for the future.”

Given India’s aspirational plans, India might be the most promising destination for fab hubs in next few years. But given the chip shortage over the last two years due to COVID-19 pandemic and logistics issues, there was an urgent need for expanding semiconductor manufacturing capacity, and the chip manufacturers have already started making investments.

For instance, Intel announced massive capacity expansion plans in the US and Europe to fight the chip shortage over the last three months. Intel revealed $20 billion investments for building a manufacturing mega-site in New Albany, Ohio, and 80 billion euros in the European Union over the next decade along the entire semiconductor value chain. And given that Intel, the biggest name in the chip industry, is taking time to formulate plans, other industry players are likely to take a cue from Intel and follow.