What Union Minister Ashwini Vaishnaw’s visit to US means for India’s semiconductor dreams

17 months since the government announced its semiconductor manufacturing scheme with a financial outlay of Rs 76,000 to make India a chip manufacturing nation, yet none of the big names such as Intel, TSMC, Samsung, Global Foundries, Micron has given clear indications to setting up fabs or ecosystem in the country. While the MEITY (ministry of Electronics & IT) ministers have been confident about big players coming to India in due course of time, now India’s Electronics & IT minister Ashwini Vaishnaw is on a three-day visit to USA, where he will be meeting leading chip players to convince them to invest in India.

When the world was hit hard by the chip shortage in the early days of the COVID-19 pandemic, back in December 2021, India was one of the first few countries to announce the incentive to build a chip ecosystem in house. The scheme with a financial outlay of Rs 76,000 crore had received some positive response from leading chip manufacturing companies but none had applied. The US-memory chip manufacturer Micron had planned to set up its Assembly Test Packaging (ATMP) in India but soon the US Chips and Science Act (to boost chip manufacturing in US) was approved, the plans was put to halt.

But as the chip manufacturing companies are looking to scale up their production to meet the $1 trillion semiconductor market by 2030, they are also securing their supply chain and looking at investing in alternate locations. And be it ATMP to start with, Minister Vaishnaw’s outreach could play an curtail role in attracting some players to expand their operations in India.

“The outreach by Minister Ashwini Vaishnaw to semiconductor leaders in Silicon Valley is very welcome and important step in instilling confidence among global leaders in India's semiconductor mission. Global Indian's have to play a very important role in achieveing goals of "Making India a Semiconductor Nation,” said veteran Satya Gupta, who is also the President of VLSI Socitey of India.

"Both Minister and ISM should seriously consider setting up an "India Semiconductor Desk" in Silicon valley to facilitate cooperation between Global Semiconductor companies and India Semiconductor Mission," he added.

The 'India Semiconductor Desk' in Silicon Valley Gupta mentioned about will be an extension of India Semiconductor Mission. It will also serve as facilitation agency for any semiconductor collaboration and investment from the Silicon Valley into India. “This will show India's intent of Ease of doing business. The desk will be manned by semiconductor professionals who have good network in the semiconductor industry and academic research institutions,” explained Gupta.

Some of the industry veterans believe that the minister’s outreach to chip companies is a sensible step before the government reopens the PLI scheme for applications, which has been closed for the last 15 months. “If none of the leading chip players apply once the scheme is reopened, it could be an embarrassing situation for the Indian government,” said an industry veteran. Even if the companies commit for ATMP, this will be a big to start with.

Some positive response from the minister’s visit is already visible as an MoU is signed between India Semiconductor Mission (ISM) and Purdue University, US, for cooperation in capacity building, R&D and industry participation (for semiconductors in India).

Also, Minister Vaishnaw’s visit has come two months after the United States of America signed a Memorandum of Understanding (MoU) on Semiconductor Supply Chain and Innovation Partnership with India.  USA has also been trying to sideline China, which has been attempting to become a big player in chip ecosystem by imposing various restrictions. Amidst all this, for India’s geographical location benefit and availability of skilled labour, USA also finds India as a trusted partner for growing a parallel chip ecosystem.

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