Can India Catch Up with the US, Taiwan and China in the Global Chip Race?
Inside India’s Semiconductor Manufacturing Ambitions.
Can India emerge as a global semiconductor manufacturing hub alongside the US, Taiwan, and China?
This in-depth analysis explores India’s chip manufacturing strategy, challenges, incentives, and long-term prospects in the global semiconductor race.
Can India Catch Up with the US, Taiwan and China in the Global Chip Race?
The global semiconductor industry has become one of the most strategically important sectors of the 21st century. From smartphones and electric vehicles to artificial intelligence, defense systems, and cloud computing, chips are the backbone of the modern digital economy.
Today, the global chip race is dominated by the United States, Taiwan, and China, with South Korea and Japan playing crucial supporting roles.
Against this backdrop, India has announced ambitious plans to position itself as an alternative semiconductor manufacturing hub for companies seeking to diversify production beyond China. The question remains: can India realistically catch up with global chip leaders, and if so, how far and how fast?
Why the Global Semiconductor Race Matters.
The semiconductor supply chain is highly concentrated and geopolitically sensitive:
Taiwan, led by TSMC, dominates advanced logic chip manufacturing.
The United States controls chip design, intellectual property, and key manufacturing equipment.
China is aggressively investing billions to achieve semiconductor self-sufficiency.
South Korea excels in memory chips through Samsung and SK Hynix.
Recent supply chain disruptions, US–China tech tensions, and pandemic-driven shortages have exposed the risks of overdependence on a few geographies. This has created an opening for countries like India under the “China plus one” manufacturing strategy.
India’s Semiconductor Vision: From Consumer to Creator.
India is one of the world’s largest consumers of semiconductors, importing over $30 billion worth of chips annually. However, until recently, it had virtually no domestic chip fabrication capacity.
To change this, the Indian government launched the India Semiconductor Mission (ISM) with incentives exceeding $10 billion, focusing on:
Semiconductor fabrication plants (fabs),
Display manufacturing,
Chip design ecosystem,
Advanced packaging and testing (ATMP/OSAT),
Supply chain localization,
India’s objective is not immediate leadership but becoming a credible, reliable, and scalable alternative manufacturing hub.
India vs US, Taiwan and China: A Reality Check.
Technology Gap:
Taiwan and the US operate at 3nm and 5nm nodes. India’s initial fabs are expected to start at 28nm–65nm, suitable for automotive, power electronics, defense, and IoT.
While these are not cutting-edge chips, they are still in high demand globally and face persistent supply shortages.
Ecosystem Maturity.
The US and Taiwan have decades-old semiconductor ecosystems.
China has invested over $150 billion in the past decade.
India is building its ecosystem from scratch, which is both a challenge and an opportunity.
Talent Advantage.
India has a strong base of semiconductor design engineers working for global companies like Intel, Qualcomm, Nvidia, AMD, and Apple. However, fab-level manufacturing expertise is still limited and must be imported or developed.
Why Global Companies Are Looking at India.
India’s semiconductor push aligns well with global industry needs:
China Plus One Strategy
Companies want supply chain resilience and geopolitical risk mitigation.
Cost Competitiveness
Lower labor costs and government subsidies improve long-term economics.
Large Domestic Market
India’s booming electronics, automotive, EV, telecom, and defense sectors provide captive demand.
Government Support: Production-linked incentives (PLI), capital subsidies, infrastructure support, and fast-track approvals.
Major players like Micron, Tata Group, Foxconn, AMD, and Applied Materials have already announced investments or partnerships in India.
Please Read :SIDBI – Powering India’s MSME Growth: Funding, Schemes & Business Support.
Key Challenges India Must Overcome.
Despite momentum, India faces significant hurdles:
1. Infrastructure Readiness
Semiconductor fabs require uninterrupted power, ultra-pure water, clean rooms, and advanced logistics. Only a few Indian states currently meet these standards.
2. Supply Chain Depth
India lacks local suppliers for:
Specialty chemicals
Semiconductor-grade gases
Silicon wafers
Lithography components
Building a full semiconductor supply chain will take years.
3. Long Gestation Period
A fab takes 5–7 years to become fully operational and profitable. Policy consistency is crucial.
4. Global Competition
The US CHIPS Act, EU Chips Act, and China’s massive subsidies mean India is competing against well-funded rivals.
Where India Can Realistically Win.
India does not need to beat Taiwan or the US at advanced nodes to succeed. Instead, it can focus on:
Mature node manufacturing (28nm–90nm)
Power semiconductors and compound chips
Automotive and EV chips
Defense and space-grade semiconductors
Advanced packaging and testing
Chip design, verification, and embedded systems.
This approach aligns with global demand trends and India’s strengths.
Long-Term Outlook: Catching Up vs Catching a New Wave.
India is unlikely to “catch up” with Taiwan or the US in leading-edge chip manufacturing in the next decade.
However, it does not need to.
Instead, India can:
Become a trusted second-source manufacturing hub
Capture a significant share of mature-node semiconductor production
Build a resilient domestic electronics and defense ecosystem
Position itself strongly for the next technology wave (AI accelerators, automotive chips, advanced packaging).
If policy stability, infrastructure investment, and ecosystem development continue, India could emerge as one of the top five global semiconductor manufacturing destinations by the 2030s.
Conclusion: Can India Succeed in the Global Chip Race?
India’s semiconductor journey is just beginning. While it cannot instantly match the technological dominance of the US, Taiwan, or China, it has a realistic and strategically sound pathway to success.
By focusing on scale, reliability, mature technologies, and supply chain resilience, India can establish itself as a critical node in the global semiconductor ecosystem. The global chip race is no longer about a single winner, it’s about diversified, resilient manufacturing and in that race, India has a genuine opportunity to succeed.
Team: Hindustan Digest
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