2024 General Elections in India: Is India capable of developing a top-notch computer chip industry from the ground up?

As part of India’s transformation into a world-leading economy, Prime Minister Narendra Modi has set a goal for India to become part of the global economy. 5 major computer chip manufacturers By 2029, from a nearly empty base. With the rise of artificial intelligence and volatile geopolitics leading to a global scramble to build chip factories in the country, what are the chances that India will be able to compete?

Rakesh Kumar The University of Illinois at Urbana-Champaign professor said there are two main factors driving countries to become self-sufficient in semiconductors. The first is the recognition that chips are now essential to national security and industry in the wake of shortages at the height of the coronavirus pandemic. The second is a desire to capture some of the value of a huge and growing industry. Last year it was $526.9 billion.

Currently, Taiwan is making 68% of the world's chips, one company, TSMC, accounts for the majority. The imminent threat of China's invasion of Taiwan is causing a wave of panic and investment. “Everyone is predicting different types of geopolitical games,” Kumar said. “If one or several countries have ownership, [chip manufacturing]Then they can use that as leverage. ”

Therefore, building a local chip industry is logical, but it is not easy. One approach is to attract foreign investment and capture much of the chip manufacturing currently done in China. Apple is considering moving to China. 1/4 of iPhone production For example, from China to India by next year. But for silicon to become truly independent, Kumar says, it will require significant and sustained investment, as well as infrastructure to support suppliers and train skilled workers.

Even with large-scale support from the government, Indian chip factories lack the efficiency and scale of a mature industry and may initially struggle to remain competitive, possibly competing with Chinese alternatives. Mr. Kumar said he would be charged twice as much. 'Who's going to buy Indian chips?' And who's going to continue to buy these products, which will take him five, 10 years to become cost competitive?

If India wants to grow its industry, it may need to introduce protectionist laws that require local companies to use local chips, Kumar said.

One advantage for India, Kumar said, is that the country is chasing old technology to gain a foothold in the market, rather than trying to compete with the cutting edge of the industry.india goals The goal is to increase production of 28 nanometer chips. The chips are used in cars and consumer electronics rather than computers and smartphones, and rely on manufacturing techniques that date back to the early 2000s. “This is not a sexy chip,” Kumar says. “But there's a big market.”

John Goodenough Researchers at the University of Sheffield in the UK found that not only is securing chip supply critical to national security, but preventing adversaries from sneaking in malicious code and surveillance requires that everything from design to manufacturing is critical. He said that countries are beginning to recognize that it is essential to manage the entire process leading up to the end. Features.

Goodenough says there is reason to believe India can succeed because it already has a core of talent. Approximately 125,000 workers, accounting for 20% of the world's chip design workforce. But he said all other parts of the supply chain will require large, long-term investments, with no guarantee of success and a highly uncertain playing field as countries around the world jockey for position. He states that he is deaf.

“It depends on the depth of their pockets and the time of the game they play, because that's the game Taiwan and South Korea have been playing for the last 20 to 30 years,” Goodenough said. “Playing is an expensive, long-term, patient game of capital.”

but Awanish Pandey in The Indian Institute of Technology in Delhi rejects the idea that Indian chips will struggle to compete on price with Taiwanese products, as Mr. Kumar has warned. And he hopes the country can train a large workforce with the skills needed to make government investments successful.

“We are fully committed,” says Pandey. “Time will tell how big this thing is going to be in the future. The goal at this point is just to get started. It's a game of money and intellectual property. At the moment the government is giving away the money. But intellectual property is something we have to create.”