India’s chip push draws $12 billion investment

India has attracted $12 billion in investment pledges since unveiling its new semiconductor policy, signaling a swift push to establish itself as a chip-making nation, according to Technology Minister Ashwini Vaishnaw. The commitments were made by key players in the semiconductor sector, such as equipment producers, materials manufacturers, and chemicals firms, during a recent industry event in New Delhi.

This surge in investment follows India's announcement in July of a $13.4 billion semiconductor fund, which builds upon a previous $10 billion subsidy program that has facilitated the establishment of fabrication and assembly plants by companies like the Tata Group and Micron Technology Inc. in the country.

While the minister did not disclose specific company names, he assured that the investments will be distributed over the next two to three years. Some of the firms approved under the earlier policy, including Micron and the Murugappa Group's chip unit, are already generating revenue. Their operations are backed by the growing capacity being developed in the country.

At the same event, Prime Minister Narendra Modi addressed global investors, highlighting India's skilled workforce and semiconductor-friendly policies. Applied Materials pledged $5 billion in investments over the next decade, while Lam Research intends to spend around $1 billion on a local manufacturing facility. Micron, for its part, plans to manufacture and test hundreds of millions of chips in India starting in 2027, following the commencement of production at its local plant this year.

In addition to these commitments, Tata Group's electronics and chip unit signed five agreements covering the semiconductor supply chain during the conference, including a partnership with Nexperia BV for wafer manufacturing, assembly, and testing at its Gujarat fabrication plant, as well as an assembly facility in Assam. Furthermore, Tata Electronics entered into a collaboration with Fujifilm to produce critical raw materials locally and develop a supply chain surrounding the Dholera unit in Gujarat.

As Tata Electronics' CEO Randhir Thakur pointed out, the focus has shifted from the question of whether India can manufacture chips to how quickly and thoroughly the country can build its semiconductor ecosystem.