India aims to make domestic microchips by end of 2024

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India will break ground on its first semiconductor assembly plant next month and begin producing the country’s first domestically manufactured microchips by the end of 2024, according to a senior government official who is overseeing New Delhi’s $10bn chipmaking foray.

Ashwini Vaishnaw, India’s minister of electronics and information technology, said US semiconductor company Micron Technology, which is setting up a chip assembly and test facility in Gujarat, would start construction in August on the $2.75bn project, which includes government support.

Vaishnaw said the India Semiconductor Mission spearheaded by Narendra Modi’s government was also doing “extensive work” to marshal support from other supply chain partners, including suppliers of chemicals, gases and manufacturing equipment, alongside companies interested in setting up silicon wafer fabrication plants. 

“This is the fastest for any country to set up a new industry,” Vaishnaw said in an interview with the Financial Times. “I’m not just saying a new company — this is a new industry for the country.” 

He added: “Eighteen months is when we have targeted for [the first] production to come out of this factory — that is, December of ‘24.” 

The minister’s remarks set a demanding timeline for Modi’s government as it strives to build up India’s capacity in producing smartphones, batteries, electric vehicles and other electronics. The country’s tech manufacturing sector lags behind those of east Asia’s export-led economies, notably China, which began earlier and offered more subsidies to industry.

New Delhi recently reopened bids for its $10bn subsidy programme for chipmakers after three initial applicants, including from a consortium of industrial group Vedanta and Taiwanese Apple supplier Foxconn, failed to qualify for government support.

When relaunching the application process, India tweaked the specifications to seek proposals to produce “mature nodes” of 40 nanometres or above — larger than the more expensive 28nm chips it previously solicited.

Vaishnaw said that officials were now in talks with more than a dozen applicants. “Out of 14-odd companies which are in discussion with us, two of them are very good, which should be able to make it,” he said, declining to provide details.

Vedanta added that it and Foxconn were “working together to meet the government’s revised guidelines”. Foxconn declined to comment. 

Some critics of India’s chipmaking ambitions argue that the government has set too high a bar by trying to replicate an entire, highly demanding industry in which countries including Taiwan, Japan and the US already hold a commanding lead. Instead, they say, it should focus on specific parts of the value chain where it already has proven expertise, including design. 

Vaishnaw dismissed this judgment, saying India had “50,000-plus” semiconductor designers and that “practically every complex chip in the world” was already designed in India.

“That ecosystem is already there,” he added. “Getting the fab is the next step, which is what we are focused on, and the Micron win is a very big win.”

The US is stepping up its collaboration with India on chips, part of an expanding partnership cemented during Modi’s state visit to Washington last month. Alongside the Micron deal, in which the US group will spend $800mn, chip equipment maker Applied Materials has announced a plan to invest $400mn in a new engineering centre in Bengaluru. 

Vaishnaw, who is also India’s railways minister, separately defended his decision to remain in that post despite calls to step down after a disaster in Odisha last month that killed nearly 300 people. 

“At a time of a major calamity, leaders don’t run away,” he said. “They face the calamity, they fight it out, fix the things, and set the system right for the future.”