INVC NEWS
Mumbai : India’s trajectory towards becoming the new ‘world king’ of microchip manufacturing is laden with immense potential and promise. The strategic collaboration between Foxconn and STMicro to establish a chip manufacturing plant in India marks a pivotal moment in this journey .
India: The Emerging Hub of Microchip Manufacturing
In a rapidly evolving global landscape, India stands poised to become the next powerhouse in microchip manufacturing. The shifting dynamics of geopolitics, particularly concerning China’s expansionist policies and the potential threat to Taiwan, have prompted a significant reevaluation of global supply chains. Among the key players in the microchip industry, Taiwan, with its semiconductor giants, has attracted substantial attention. However, recent developments indicate that India is emerging as a formidable contender in this arena, with the potential to reshape the future of microchip production.
The Changing Tide
With growing concerns over Taiwan’s vulnerability to geopolitical tensions, many semiconductor companies are exploring safer investment options. Historically, Taiwan has been a major supplier of microchips to the world, powering a wide array of devices, from electronics to automotive systems. Yet, in light of recent uncertainties, Taiwanese firms are increasingly looking towards alternative destinations for their investments, and India is rising to the forefront.
Foxconn’s Strategic Move
Taiwanese electronics manufacturer Foxconn, in collaboration with French-Italian semiconductor company STMicro, has made a significant announcement that could potentially alter the global microchip landscape. Together, these industry giants have decided to establish a state-of-the-art 40-nanometer chip manufacturing plant in India. The move signifies a shift towards diversifying the global microchip supply chain and reducing dependency on a few key players.
A Boon for India’s Tech Ecosystem
The chips produced at this Indian plant are destined for use in various applications, including cameras, printers, automobiles, and an array of other machines. Foxconn Technologies Chairman, Young Liu, expressed his belief that India has the potential to ascend as the reigning monarch of microchip manufacturing. He envisions India as the world’s new manufacturing epicenter, a transformation that could revolutionize the technology industry. Taiwan is poised to play a pivotal role in India’s journey towards microchip dominance, as it seeks to leverage the Indian market’s potential.
Government Initiatives Fueling Growth
To facilitate this transformation, it is imperative for the Indian government to provide the necessary support and incentives. One such initiative is the Semiconductor Manufacturing Policy (PLI Scheme), which could prove instrumental in attracting foreign investments and fostering indigenous chip manufacturing. Under this policy, foreign companies are encouraged to establish chip manufacturing facilities in India, thus contributing to the country’s self-reliance in semiconductor production.
India’s Current Dependency
Currently, India depends heavily on imports for microchips, sourcing them from countries such as Taiwan, China, Japan, South Korea, and the United States. These imports are often routed through Malaysia before reaching Indian shores. This dependency underscores the urgency of achieving self-reliance in microchip production. In December 2021, the Indian government took a significant step by unveiling a new semiconductor and display manufacturing policy, with the ambitious target of achieving self-sufficiency in semiconductor production by 2026.
A Global Ranking Perspective
In the realm of semiconductor manufacturing, Taiwan, China, Japan, South Korea, and the United States have long held dominant positions as the top five players. India’s absence from this list highlights the gap that needs to be bridged. However, the nation’s potential to become a major hub for microchip manufacturing cannot be underestimated. With the right investments, policy support, and strategic collaborations, India has the capacity to ascend the rankings and compete on a global scale.
