A look at India's $10B incentive scheme for chip makers, as some experts warn about its lack of hardware expertise and erratic transport and public utilities
India's $10B incentive scheme is the opening bid in a state-led attempt to buy its way into chip manufacturing, and the expert warnings in this piece — no deep hardware talent base, erratic transport and public utilities — name the two inputs subsidies cannot purchase. The subsequent record bears those warnings out: the planned $3B ISMC plant stalled after consortium partner Tower was absorbed into Intel's takeover plans, and the Foxconn-Vedanta joint venture ran into trouble of its own.
New Delhi has since doubled down rather than retrenched, expanding to an $18.2B push across ten projects in six states aimed at cutting import reliance — while Bloomberg argues the mission is over-indexed on self-reliance at the expense of segments India could scale quickly.
First-order effects
Prospective fab investors must price India's infrastructure and talent gaps directly against the subsidy, which is why anchor projects like ISMC and Foxconn-Vedanta have wobbled even with incentives on the table.
Second-order effects
China's parallel buildout raises the competitive bar: TrendForce projects its share of global mature-node production rising from 31% in 2023 to 39% in 2027, a wave of subsidized capacity that could swamp India's nascent fabs on cost before they reach scale.
Third-order effects
If incentive-first industrial policy keeps colliding with execution constraints, sovereign chip programs will be judged less on headline budgets than on whether they can retain partners and convert announcements into operating plants — the gap between India's $10B scheme and its later $18.2B expansion is so far measured in projects announced, not wafers shipped.
The trend: State-backed semiconductor industrial policy is scaling faster than the talent and infrastructure it depends on, making partner retention and project conversion the real test of schemes like India's.
Post pandemic de-globalization hasn't led to a a bi-polar world, but a world with a neutral block with increased leverage - India, Saudi, gulf. Seeing India expanding it's chips industry to bridge the China-US divide will shape new global supply chains https://www.ft.com/...
“It's an attempt to follow the China path and create manufacturing in India,” says Booth's Raghuram Rajan of the country's bid to begin making semiconductors. https://www.ft.com/...
Lack of semiconductor manufacturing in India isn't a fault of Indian government policy/infra, it's geopolitics. The West simply doesn't want India making cutting-edge chips. It's too big an economic force-multiplier in the hands of a country that's too big. Creates another China …
“Europe, the UK, the US and many other countries are simultaneously laying out billions to subsidise the onshoring of chipmaking...To have any chance of achieving its goal, India will need to move exceptionally quickly and decisively.” https://www.ft.com/...
India's ambition to enter the chipmaking business comes at a time of growing trade and geopolitical tension as western economies have pushed to decouple their supply chains from China, which has invested heavily to become a leader in the semiconductor industry. @JohnReedwrites ht…
India's high-stakes bid to join the global semiconductor race India is set for semiconductor manufacturing with supply chain being disrupted post pandemic. India offers opportunity given largest talent pool, business friendly climate and largest market https://www.ft.com/...
Modi puts $10bn of incentives on the table to tempt manufacturers to set up new fabs. A push into microchips, which demands some of the most exacting factory conditions of any in manufacturing, would mark a MAJOR shift for India. by @JohnReedwrites https://www.ft.com/...
Excellent piece on India's push into semiconductors w/ $10bn package. [Fascinating subtext is a debate b/w @narendramodi vs @ptrmadurai: how to allocate $10bn. Defray costs for industry today OR Fund universities to train chip engineers for tomorrow?] https://www.ft.com/...
The Big Read: The road ahead will not be smooth for India as it tries to market itself abroad to chipmakers as an alternative to China. To have any chance of achieving its goal, India will need to move exceptionally quickly and decisively https://www.ft.com/...
India's ambition to enter the chipmaking business comes at a time of growing trade and geopolitical tension as western economies have pushed to decouple their supply chains from China https://www.ft.com/...
“India might better use its money in chip assembly and packaging facilities, where labour costs are more important. If India were to direct its subsidies...$10bn could go a long way,” says Professor @crmiller1. Read more in @FinancialTimes https://www.ft.com/...