Can rely on India when ‘chips’ are down: Modi
PM Modi promotes India as a semiconductor hub at SEMICON India 2024, highlighting investments, supply chain resilience, and job creation goals.
Greater Noida Prime Minister Narendra Modi on Wednesday pitched India as the best global destination to nurture an ecosystem for semiconductors and stressed on the resilience of supply chains as he sought to boost investments in domestic manufacturing of a component that sits at the intelligent core of a dizzying array of items, from vacuum cleaners to smartphones to cars.
Modi was speaking at the inauguration of the SEMICON India 2024 – a three-day conference to showcase India’s semiconductor push that envisions making the country a global hub – at the India Expo Mart in Greater Noida.
India’s reform focussed government, its growing manufacturing base, and its aspirational market that is aware of technological trends are the three dimensions unique to India that make the country best suited to enable an ecosystem for semiconductor manufacturing, Modi said.
“India’s semiconductor sector is on the brink of a revolution, with breakthrough advancements set to transform the industry,” Modi said. “Today’s India inspires confidence in the world… When the chips are down, you can bet on India.”
Modi’s comments came at a critical time for the semiconductor manufacturing industry globally, which is undergoing a churn due to mounting tensions between the US and China. Prominent chip makers such as Taiwan are potentially caught in the crosshairs, opening up opportunities for countries such as India that have dramatically ramped up their capacities to build domestic supplies of semiconductors.
“This is the right time to be in India. You are at the right place at the right time. In 21st-century India, the chips are never down,” Modi said.
“Whether it is mobile manufacturing, electronics, or semiconductors, our focus is clear — we want to build a world that doesn’t stop or pause in times of crisis but keeps moving forward,” he added.
Around 250 companies took part in SEMICON. Firms that participated along with their chief executives included US’ Micron, Synopsys, Cadence, Jacobs, Teradyne, Applied Materials, and Lam Research; Taiwan’s PSMC; Netherlands’ NXP Semiconductors; Belgium’s IMEC; Japan’s Renesas, Tokyo Electron, Rapidus, HSR, and Advantest; and India’s CG Power, Kaynes Technology, Tata Electronics, and Infineon.
Modi reiterated India’s ambition — to make the country a semiconductor powerhouse. He talked about India’s semiconductor mission under which the government offers 50% financial support to companies to set up chip-manufacturing facilities.
“India’s semiconductor ecosystem is a solution not just for India’s challenges but also for global challenges,” he said. “India’s semiconductor industry is equipped with special diodes where energy flows in both directions”
Modi spoke about the importance of supply chains, and underscored the need to act to ward off any disruption. “Whether it was Covid or war, there hasn’t been a single industry to remain unaffected by supply chain disruptions,” he said.
In recent years, global markets have been roiled by chip shortages, with companies around the world, including the US, seeking to boost their domestic semiconductor manufacturing facilities.
The PM expressed pride in India’s central role in building resilience across sectors, positioning the country as a key player in the global mission to safeguard supply chains. “Resilience of the supply chain is very important,” he said. “India is working to create the same in different sectors of the economy.”
He stressed on the need to set up the entire ecosystem, from chemicals to gases.
HT reported on September 11 that Modi, in his roundtable discussion with top global semiconductor business leaders, said that India Semiconductor Mission (ISM) 2.0 would focus more on developing the supply chain for semiconductors by concentrating on raw materials, gases, equipment, lead frames, substrates, and chemicals.
Under ISM 1.0, which was launched in December 2021 with an outlay of ₹76,000 crore (about US$10 billion in 2021), the government has so far approved one fabrication unit (or fabs, which actually make the chips) and four ATMP (assembly, testing, marking, and packaging) units, which develop the end products using chips made by fabs, with a combined investment of ₹1,52,307 crore or US$18.15 billion.
Three ATMP units (by Micron, CG Power and Kaynes Semiconductor) are located in Sanand in Gujarat and another (by Tata Semiconductor Assembly and Test Private Limited) in Morigaon in Assam. The sole fab (by Tata Electronics) unit is in Dholera in Gujarat.
Modi explained that India’s semiconductor policy provides financial support for front-end fabs, display fabs, semiconductor packaging and other critical components of the supply chain. “Our dream is that every device in the world will have an Indian-made chip,” he said, echoing his statement made from the ramparts of Red Fort on August 15.
India’s electronics sector is currently valued at over $150 billion.
Modi said that India’s goal is to increase the value of the electronics sector to $500 billion and create six million jobs in the sector by 2030. This growth, he said, would directly benefit India’s semiconductor sector. “Our goal is that 100% of electronic manufacturing should happen in India. India will make semiconductor chips and the finished product too”, he said.
He explained that while industries invest and create value, the government provides stable policies and ease of doing business. The PM said that India provides an integrated ecosystem drawing parallels with an integrated circuit used in the semiconductor industry and highlighted the much-discussed talent of India’s designers.
India’s contribution to the world of designing is 20% and is growing continuously, Modi said, adding that India is creating a semiconductor workforce of 85,000 technicians, engineers and R&D experts. “India is focused on making its students and professionals industry ready,” the PM remarked, recalling the first meeting of the Anusandhan National Research Foundation, which aims to give new direction and energy to India’s research ecosystem. He also mentioned a special research fund of ₹1 lakh crore.
Modi and multiple semiconductor CEOs who spoke at the inauguration talked about the multiplier effect of the semiconductor industry – how for every person hired directly in the semiconductor industry, multiple people are hired in related industries, thereby increasing employment.
Hidetoshi Shibata, CEO of Japan’s Renesas Electronics Corporation that has partnered with CG Power for its AMTP unit in Sanand, said that the pilotline was already under construction.
CEO of Dutch company NXP Semiconductors, Kurt Sievers said the company would double its research and development efforts to more than $1 billion.
Modi said that the Covod-19 pandemic and wars showed that no industry was immune to supply chain disruptions. “Resilience in supply chains is crucial,” he said as he posited India as a resilient and trustworthy partner.
He said that India was chosen as vice chair of the Indo-Pacific Economic Framework’s Supply Chain Council and is a key partner in the QUAD Semiconductor Supply Chain Initiative. He said that agreements were signed with Japan and Singapore, and India was deepening cooperation with the United States in the semiconductor sector.
Speaking about the relationship between technology and democratic values, the PM said that the positive power of technology was amplified when combined with democratic values. He also cautioned that the withdrawal of democratic values from technology results in harm.
Highlighting the uniqueness of India’s aspirational and tech-oriented society, the PM said that the meaning of chips in India was not just limited to technology but is a medium to fulfil the aspirations of millions of citizens. Underlining that India is a huge consumer of such chips, PM Modi emphasised that the world’s finest digital public infrastructure was built upon it. Recalling the pandemic that hobbled global banking systems, Modi said that banks in India were running efficiently.
“Be it India’s UPI, Rupay Card, Digi Locker or Digi Yatra, multiple digital platforms have become a part of the everyday life of the people of India,” he noted.
To become self-reliant, the PM said India was increasing manufacturing in every sector, making green transition on a large scale and the demand for data centres was also increasing. He noted that India was one of the largest importers of mobile phones a decade ago but today, it is the world’s second-largest producer and exporter of mobile phones. He cited India’s rapid progress, particularly in the 5G handset market, and stated that India is now the second-largest market for 5G handsets globally, just two years after the roll-out of 5G.