Modi's dream of building a semiconductor industry: Not only to create "Made-in-India" chips, but also to become a global center for chip innovation

Does India also want a share of the global semiconductor industry?

According to a report by Cailian Press, Indian Prime Minister Narendra Modi said on September 2 that India will start commercial semiconductor production by the end of 2025. Meanwhile, in the future, India will become a global "chip innovation center."

Modi made these remarks at the opening ceremony of the annual India Semiconductor Conference held in New Delhi. He said, "Commercial chip production will start this year. This fully reflects India's rapid development pace in the semiconductor field."

Modi at the annual India Semiconductor Conference

"We are developing some of the world's most advanced chips," Modi said.

Although ambitious, in fact, Modi is still waiting for India's first domestically-made chip.

In his Independence Day speech in August this year, Modi said that India's first domestically-made semiconductor chip is expected to be launched by the end of 2025. However, he did not disclose the specific launch time.

It is understood that this "Made in India" chip will use a 28nm process, while the world's most advanced chip process has reached 2nm.

It seems that it is not that easy for India's "chip-making dream" to become a reality.

Restarting the semiconductor strategy

On August 15, Modi announced in his speech on India's 79th Independence Day that India will restart its "semiconductor strategy."

He pointed out that India's planning in the semiconductor field can be traced back half a century ago, but the then plan was stagnant for a long time, resulting in India lagging behind for decades in the key industrial chain.

"The 21st century will be driven by technology. Whoever masters technology can reach new heights in development. However, India's relevant documents and plans in the semiconductor field have been shelved for half a century. Compared with other semiconductor advanced countries at the forefront of the world, we have been left behind by the times," Modi said.

In fact, India has been paying attention to semiconductor manufacturing since the 1960s and has cooperated with companies in Europe, the United States, Japan and other places.

However, India's semiconductor strategy has been launched and failed repeatedly.

In 2007, India launched a semiconductor policy, offering a 20% capital expenditure incentive for a 10-year period to semiconductor companies investing in India. However, insufficient infrastructure, complicated regulations and approval processes, etc., hindered international giants from investing in factories in India at that time.

In 2013, India launched the semiconductor plan again. However, due to the issue of capital expenditure, Jaiprakash Associates, which had submitted a letter of intent, finally chose to withdraw in 2016.

In 2021, the Indian government launched the "Semicon India" plan for the third time, with an initial budget of about $8.7 billion. The Indian government promised that this time it would provide up to 50% of the project cost funds for the entire industrial chain.

However, this plan still failed to make obvious progress. Among them, Foxconn and India's Vedanta Group planned to invest $19.5 billion to establish a semiconductor joint venture, but finally announced the termination of cooperation due to relevant interest conflicts.

This is not the first time that cooperation has stopped. At the beginning of 2015, the $10 billion project between India's Adani Group and Israel's Tower Semiconductor also suddenly stopped. In May this year, the project of India's multinational IT technology company Zoho planning to invest $700 million to build a compound semiconductor wafer factory in Karnataka, India, also aborted. In September, TSMC officially rejected the Indian government's invitation to build a factory.

India's "chip-making dream" has a long way to go. Due to repeated failures in multiple attempts, India has always had difficulty in occupying a more important position in the global semiconductor industry map.

This time, Modi said that the Indian government has removed long - standing problems and is "promoting semiconductor work" in a mission - mode. He emphasized that currently, there are 6 chip projects under construction in India, and another 4 projects have just been approved.

These projects are being built in Gujarat, Assam, Uttar Pradesh and other places. Ashwini Vaishnaw, the Minister of Electronics and Information Technology of India, said that India's first "Made in India" chip will be produced soon.

How to make the most advanced chips?

How will India make advanced chips this time?

Some semiconductor research institutions analyze that in the absence of experience in advanced processes, equipment and talent accumulation, for India to successfully domesticate chips in the short term, it needs to introduce technology and cooperate internationally, including introducing technology and second - hand equipment and accelerating the training of engineers. Moreover, it also needs high - level subsidies and industrial support from the government, as well as the choice of the 28nm process.

Behind India's choice is the huge technological gap in the semiconductor manufacturing industry: TSMC was able to mass - produce 28nm process chips in 2011, while the world's most advanced chip level has reached 2nm in 2025.

However, the Indian Ministry of Electronics and Information Technology disclosed that the 28nm process node belongs to the mainstream mature process in the current global semiconductor market. At present, most industries do not require extremely cutting - edge processes, and 28nm chips can be widely used in various industries, including automobiles, consumer electronics and the Internet of Things (IoT), etc.

Relevant industry analysts also pointed out that India's local automobile manufacturers (such as Tata Motors, Mahindra) and electronic brands (such as Lava, Micromax) are expected to become the first batch of customers for India's domestically - made chips.

Even so, it is not that easy to produce the 28nm "Made in India" chips.

As early as late May, Modi announced that the first "Made in India" chip in the semiconductor factory in northeastern India was about to arrive. However, until now, India's first chip has not arrived, and the original earliest release time of this chip was December 2024. It is understood that this 28nm process chip is led by the Tata Group. After mass production, it will be mainly used in consumer electronics, automobiles and the defense field.

According to the latest news, the release has been postponed to the second half of 2025.

Modi and the Indian government are still waiting.

"I think India's domestically - made chip may come out later than expected," an unnamed expert who has been engaged in semiconductor industry research for many years told a reporter from Time Weekly. In his opinion, India still needs to overcome multiple challenges such as technology, supply chain and infrastructure.

The multinational investment bank Jefferies also pointed out that the Indian semiconductor industry is growing, but it faces challenges such as an underdeveloped supply chain, a lack of skilled manufacturing talent and global competition.

A report from Semiconductor Industry Watch also pointed out that India still lacks sufficient chip technology accumulation. India currently needs to break through the 28nm process, while local engineers only have 40nm experience, and technology transfer mainly relies on foreign experts. In addition, the global market is currently dominated by Samsung and LG. Foxconn needs to break through technical indicators to enter the mainstream supply chain. Moreover, India can only absorb 30% of the production capacity locally, and the remaining production capacity depends on exports. Geopolitical risks may affect order stability.

This article is from the WeChat public account "Time Weekly" (ID: timeweekly), author: Ma Huan, editor: Liang Li. It is published by 36Kr with authorization.