India wants to become a semiconductor powerhouse, but it can’t do it on its
Workers assembles smartphones at Dixon Technologies factory in Uttar Pradesh, India, on Thursday, Jan. 28, 2021.
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India has big ambitions to become a semiconductor powerhouse as the world’s fifth-largest economy pushes for self-reliance in manufacturing.
Indian Prime Minister Narendra Modi has set numerous goals to propel the country’s semiconductor sector forward, with the latest and biggest target being to grow the country’s electronics sector from $155 billion today to $500 billion by 2030.
The announcement turned heads and raised eyebrows, and industry experts that spoke to CNBC have opposing views on whether the target is realistic. However, they all agree on one thing: India cannot achieve this goal on its own.
“While the speed of development seems to be fast and the momentum is there, India has just started to embark on the semiconductor industry development from scratch,” said Eri Ikeda, assistant professor at the Department of Management Studies at the Indian Institute of Technology Delhi.
Taiwan is currently the world’s largest chipmaker, holding approximately 44% of global market share, followed by China (28%), South Korea (12%), the U.S. (6%) and Japan (2%), data from Taiwanese consultancy Trendforce showed.
Bhatnagar pointed to how Taiwan’s Powerchip Semiconductor Manufacturing Corporation will help India’s Tata Electronics to build the country’s first 12-inch wafer fab in Gujarat. He also noted American chipmaker Micron Technology is set to roll the first India-made semiconductor chip in 2025. Last week, U.S. chipmaker Analog Devices and Tata Group signed an agreement to explore building semiconductor products in India. These examples, he explained, show collaboration is necessary.
Lessons from China
India is increasingly viewed as a viable alternative to China for companies looking to diversify their supply chains amid geopolitical risks. However, analysts said India first needs to learn the ropes before it can compete with the East Asian giant, especially since its semiconductor manufacturing industry is still at a very nascent stage.
China reclaimed its position as India’s top trading partner in financial year 2024, with bilateral trade between the two countries reaching $118.4 billion. India’s imports of telecom and smartphone parts from China amounted to $4.2 billion, data from the Ministry of External Affairs showed.
“India is far behind China in semiconductor manufacturing. Although India may be able to run fast and catch up, China will be running faster,” said Rishi Bhatnagar, chair of the Institution of Engineering and Technology’s future tech panel. He added that collaboration rather than competition between the two countries is paramount.
“Even China is catching up with the technological advancements of TSMC and others, and building and scaling up its semiconductor industry by importing large amounts of equipment from the U.S. and Japan,” Ikeda told CNBC in an interview.
Cozying up to the U.S.
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