India plans to launch a massive subsidy fund exceeding 1 trillion rupees to strengthen its domestic chip manufacturing capabilities, accelerate India's emergence as the next global semiconductor manufacturing hub, and aims to directly catch up with the US and South Korea by 2032.
Bloomberg cited sources who said that this large fund will provide substantial subsidies for India's chip design and manufacturing, as well as development plans for related industrial supply chains. It is expected to be officially announced as early as 2 to 3 months, but since the plan has not been finalized, details may change at any time. The Indian government is currently actively negotiating with relevant manufacturers on the specific details of this large fund.
India is ready to offer huge subsidies to attract global semiconductor giants to invest
Since taking office, Modi has actively aimed to accelerate India's semiconductor industry development, even formulating a dedicated strategic plan. Now, in order to achieve self-sufficiency and meet the growing demand for artificial intelligence, smartphones, and automobiles and home appliances, the Indian government is working to expand support for its own chip industry.
In fact, India's approach to establishing a fund is largely modeled after the US "Chip and Science Act." However, when converted into currency, compared to the US' $52 billion subsidy scale, India's 1 trillion rupees seems rather modest.
The US "Chip Subsidy Act" aims to attract global chip manufacturers to set up factories in the US through heavy investment. Similarly, India hopes to use these generous funds, along with its own technological strength, low operating costs, and vast market, to attract major global chip manufacturers to establish operations.
If we look at it over a longer period, this "investment attraction model" is similar to how India previously attracted Apple to set up production facilities. Today, as much as 25% of Apple's phones are assembled in India.
Investing heavily inevitably has its goals. India has set its sights on the semiconductor industry, hoping one day to catch up with leading countries such as Taiwan, South Korea, and the United States. Indian official Ashwini made a bold statement last November, saying that India's goal is to develop chip manufacturing capabilities by 2032 that can rival global leaders. In other words, India aims to catch up with these powerful semiconductor competitors by 2032.
India is striving to become the next semiconductor powerhouse
It is worth noting that the "chip subsidy" act introduced by the Biden administration has not reached its initial goals. Although it attracted global semiconductor giants to set up factories in the US, due to high operating costs in the US, the chips produced in these semiconductor companies' US factories have sold poorly because of price issues. For example, the chips from TSMC's US factory have had poor sales. US customers prefer to import cheaper chips from Taiwan. Finally, Trump directly imposed tariffs, which forced TSMC and its US clients to make concessions.
In terms of operating costs, India's advantage is far greater than that of the US, and there have already been many successful cases of factory construction. In fact, the Indian government launched a $10 billion incentive plan as early as 2021, and then promised to cover half of the factory construction costs for global tech giants. This eventually attracted several foreign companies, including US semiconductor giant Micron, to invest.
Micron is currently building a packaging and testing plant in western Gujarat; India's local giant "Tata Group" has specially built a chip foundry and an independent chip packaging plant in Modi's hometown. Additionally, Hon Hai Group from Taiwan is also building testing and assembly plants in India.
Compared to the US, India has an advantage in operating costs
These factories are expected to sell their chips within the vast Indian domestic market without repeating the same mistakes as the US. However, if they want to sell to the US market, they might face big problems, simply because Trump is aggressively imposing tariff barriers, especially tightening restrictions on semiconductor imports.
Original: toutiao.com/article/7618485100472238598/
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