Modi courts investors with India’s US$30bil chipmaking bet

Prime minister Narendra Modi will launch a charm offensive for global investors on Thursday as he inaugurates a massive semiconductor conference in New Delhi, marking India’s audacious bid to win a seat at the chip-making table.

Modi will use the three-day Semicon event to display India’s fledgling chip and electronics industry that barely existed a decade ago.

He’s courting global semiconductor producers, potential partners and customers for India’s homegrown contenders, as well as equipment makers and parts suppliers all seeking to ride the artificial intelligence investment wave.

“Semicon in New Delhi is Modi’s way of signaling that India has a long-term commitment to growing the chip industry,” said Pranay Kotasthane, deputy director of Bangalore-based think tank Takshashila Institution. “That’s his message to global investors,” he said.

The stakes are high for the planet’s most populous country and an economy that’s outpaced much of the world for years.

Modi is trying to prove the nation has what it takes to become a hub in higher value-added industries such as chips, all part of a bid to further modernise the economy and keep it humming by bolstering exports.

Expanding manufacturing is crucial for Modi’s vision of moving more workers from farms into better-paying jobs.

More than 600 exhibitors, over 150 speakers and 300 global companies will converge at 15,000sq m of a state-of-the-art convention centre in New Delhi for the event.

There’ll be startup showcases as well as a student hackathon.

The event comes just two months after India pledged a further ₹1.9 trillion (US$19.8 billion) in subsidies to boost local chip and electronics production.

The first round of subsidies in 2020-2021 helped Apple Inc expand iPhone manufacturing in the South Asian region — it now makes 25% of its marquee device here.

India sought to replicate that momentum in semiconductors with an initial US$10 billion fund that helped drive early initiatives.

Some of those are starting to bear fruit: conglomerates Tata Group and Murugappa Group have begun packaging and assembling chips, while US memory maker Micron Technology Inc has also commenced production.

Tata is also building a chip fabrication plant in western Gujarat state that’s due to become operational in early 2028.

Countries around the world are committing massive budgets to making chips at home as the race for AI supremacy heats up.

AI is already becoming ubiquitous in everything from self-driving cars and healthcare to finance and fraud detection.

However, as computing resources remain scarce, chips and chipmakers are fast becoming kingmakers in deciding who’s winning.

Though India’s push is in early stages, it’s accelerating efforts to build a domestic industry spanning the entire supply chain.

It’s offering seed funding to startups working on semiconductor products, support for chip-making gear as well as for new fabs and assembly plants.

Chipmaking is a complicated and long-drawn process that countries such as Taiwan, South Korea, the US and Malaysia have taken several decades to develop and perfect.

India started its campaign by making less sophisticated legacy semiconductors that are used widely in electronics and power systems, but it will have to move swiftly on to producing cutting-edge chips and advanced packaging to catch up.

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