India aims to make domestic microchips by the end of 2024

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India will open its first semiconductor assembly plant next month and start producing the country’s first domestically manufactured microchips by the end of 2024, according to a senior government official overseeing New Delhi’s $10 billion chip manufacturing sector. .

US semiconductor company Micron Technology, which is setting up a chip assembly and test facility in Gujarat, will begin construction in August on the $2.75 billion project, which includes government support, India’s Electronics and Information Technology Minister Ashwini Vaishnav said.

Vaishnav said the India Semiconductor Mission, led by the Narendra Modi government, is a “comprehensive task” to garner support from companies interested in setting up silicon wafer fabrication plants as well as other supply chain partners, including suppliers of chemicals, gases and manufacturing equipment. ” doing.

In an interview with the Financial Times, Vaishnav said, “It is the fastest way for any country to set up a new industry.” “I’m not just saying a new company—it’s a new industry for the country.”

He said: “Eighteen months is when we aim to have (the first) production out of this factory – that is, December of ’24.”

The minister’s remarks set an important timeline for the Modi government as it seeks to build India’s capacity in the production of smartphones, batteries, electric vehicles and other electronics. The country’s tech manufacturing sector lags behind the export-oriented economies of East Asia, particularly China, which started earlier and offered more subsidies to the industry.

New Delhi recently reopened bids for its $10 billion subsidy program for chip makers after three initial applicants, including a consortium of industrial conglomerate Vedanta and Taiwan’s Apple supplier Foxconn, failed to qualify for government support. are.

While restarting the application process, India changed the specifications to seek proposals to produce “mature nodes” of 40 nanometers or more – larger than the more expensive 28nm chips previously sought.

Vaishnav said officials are now negotiating with more than a dozen applicants. He declined to give details, saying, “Of the 14 companies that are in discussion with us, two are very good, which should be able to.”

Vedanta said it and Foxconn are “working closely to meet the revised guidelines of the government”. Foxconn declined to comment.

Some critics of India’s chip manufacturing ambitions argue that the government has set standards too high by trying to replicate an entire, highly in-demand industry in which countries including Taiwan, Japan and the US already hold a dominant lead. Instead, he says, it should focus on specific parts of the value chain where it already has proven expertise, including design.

Vaishnav rejected the decision, saying that India has “more than 50,000” semiconductor designers and that “practically every complex chip in the world” was already designed in India.

“That ecosystem is already in place,” he said. “Acquiring the fab is the next step we’re focused on, and Micron’s win is a huge win.”

The US is expanding its cooperation with India on chips, part of an expanded partnership cemented during Modi’s state visit to Washington last month. Along with the Micron deal, in which the US conglomerate will spend $800 million, chip equipment maker Applied Materials has announced plans to invest $400 million in a new engineering center in Bengaluru.

Vaishnav, who is also India’s railways minister, separately defended his decision to stay on in that post despite calls to step down following the disaster in Odisha last month that killed nearly 300 people.

“Leaders don’t run away in times of great disaster,” he said. “They face the disaster, they fight it, set things right and set the system right for the future.”