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Mint Primer: Why India’s first locally made chip will be a big deal – Crypto News

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The government has reiterated that the first chip from an Indian fab will debut by October. That would mark self-sufficiency in chips, 65 years after Fairchild Semiconductor chose Malaysia over India, citing bureaucratic hurdles. The milestone will help boost jobs, cut imports, and take India closer to global AI leadership. Mint explains:

What’s the latest in India’s chip quest?

In June 2023, Union minister Ashwini Vaishnaw said Micron’s $2.75 billion memory chip plant in Gujarat will be operational by late 2024. In November, the government confirmed that the Tata Semiconductor Assembly and Test Pvt Ltd in Assam will produce 48 million chips daily, likely by mid-2025. At the World Economic Forum in January, Vaishnaw reaffirmed the first ‘Made in India’ chip rollout this year, confirming its September-October debut to the media on 16 February. The chips are being manufactured at the semiconductor fab being built by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) in Dholera, Gujarat.

What purpose will these fabs serve?

Beyond cutting electronic imports and creating jobs, these fabs bring India closer to AI leadership. Memory chips, as in the case of the Micron fab, store digital data for devices like computers, smartphones, and industrial electronics. Tata’s Assam plant will develop Wire Bond, advanced flip chip and I-SIP (integrated system in package) technologies for automotive, electric vehicles, telecommunications, and consumer electronics. Tata-PSMC is building India’s first AI-enabled semiconductor fab, producing up to 50,000 wafers per month for power management, display drivers, microcontrollers, and high-performance computing, serving industries like automotive, computing, wireless communication, and AI.

Read more: What will happen if the US restricts chip supply to India?

But why is India so late in the fab game?

After failed attempts in 2007 and 2013, India’s semiconductor plans gained momentum in 2015 but solidified with the ₹76,000 crore PLI scheme in 2021. Following setbacks like the 1989 fire at the Semiconductor Complex, the country is now on track to expand its fab capacity. With current projects, India’s semiconductor production is expected to reach 180,000 wafers per month in the next few years.

How much progress has India made?

The government has secured over ₹1.5 trillion in investments from companies like Micron, Tata Electronics, CG Power, and Kaynes Technology. With a strong chip design talent pool, IIT Madras and the Indian Space Research Organisation (Isro) have already developed a 180nm Indigenous RISC-V Controller for Space Applications (IRIS) chip. The government has also allocated ₹334 crore to the Indian Institute of Science (IISc) Bengaluru for gallium nitride R&D, catering to fast chargers and 5G base stations. India must now ensure swift execution of these projects.

How does India’s fab future look?

India’s new investments will produce 28-110nm chips but advanced fabs have moved to 2-3nm for smartphones, computers, and servers. Building a 5nm production line costs about $5.4 billion, takes up to four years to reach full capacity, and needs at least 10 years to break even—by which time the tech can get outdated. That said, only 2% of global capacity is below 10nm, making India’s current focus on 28-110nm sensible, as these nodes have longer shelf lives and lower upfront costs, improving feasibility like Singapore has shown with a similar strategy.

Read more: Network of networks: Data systems can transform India’s electricity supply

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