India, according to a report from Financial Times, could embark on a significant milestone in its technology industry as it prepares to break ground its first semiconductor assembly plant. Furthermore, the country aims to produce domestically manufactured microchips by the end of 2024.
According to Ashwini Vaishnaw, India’s minister of electronics and information technology, India will break ground next month on its maiden semiconductor assembly plant in the country, while Micron Technology will commence construction in August on a $2.75 billion chip assembly and test facility in Gujarat. This holds up with a prior report on the matter, wherein the US-based semiconductor giant was set to invest up to $825 million to set up the new chip assembly and test facility, which will be its first factory in India and get support from the Centre and Gujarat govts.
It will be interesting to see when the facility and assembly plant kicks off production and enables the assembly and test manufacturing for both DRAM and MAM products, addressing demand from both domestic and international markets. The first phase of the ambitious project is set to commence operations by the end of 2024, while the second phase is likely to begin by the end of the decade.
The establishment of the semiconductor assembly plant signifies a crucial step towards reducing India’s dependence on imported microchips. By venturing into domestic chip manufacturing, India aims to enhance its technological independence and reduce reliance on foreign markets. This move aligns with the country’s broader vision of becoming self-reliant in key technologies and strengthening its position in the global semiconductor industry, as well as position itself into a major global hub for the manufacturing of electronics. By producing high-quality electronics domestically, India can also enhance its export potential, tap into global markets, as well as position itself as a competitive player in the international tech manufacturing landscape.
This has the potential to provide a slew of benefits, such as providing a fertile ground for fostering technological innovation and skill development, as well as creating new jobs and driving economic growth. Micron, while speaking about its investment in India, noted that both phases of the project will create up to 5,000 new direct jobs at Micron, as well as 15,000 jobs within the community over the next several years.
The Modi government is doing its part as well – the government already announced the Semicon India Programme under the India Semicondcutor Mission (ISM) for the development of semiconductors and display manufacturing ecosystem in the country, and Vaishnaw noted that it was doing “extensive work” to marshal support from other supply chain partners.
India’s pursuit of self-reliance in tech manufacturing is also set to gain significant momentum with Micron’s investment, and that of chip equipment maker Applied Materials, which announced its intentions to invest $400 million to set up a new engineering centre in Bengaluru. Historically, the country has relied heavily on imported electronics, leading to trade imbalances and vulnerabilities. By boosting domestic production, India aims to reduce import dependency, improve its trade balance, and build a self-reliant ecosystem that can cater to the growing demands of its vast consumer market.