Chips shortage: India woos TSMC, Intel AMD to set up manufacturing base

The crisis sweeping the global semiconductor industry is enormous. With the tech world totally dependent on chips, the problem has become fundamental, and worse, nobody knows when it will end. And India, which is trying to push itself into the forefront of the tech manufacturing, is also facing the pinch acutely. India, which is dependent on imports for all its chip needs, is now trying to address the problem holistically.

According to a report in the Times of India, the Indian government has sounded out top chip-making companies like the TSMC (Taiwan Semiconductor Manufacturing Company), Intel, AMD, Fujitsu and United Microelectronics Corp to try and set up manufacturing base in the country.

The Times of India report claims that the whole plan is being coordinated from the highest echelons of the country — the Prime Minister’s Office.

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Indian govt is ready with the red carpet

It is being said that the Indian government will go the extra mile to get any of these companies on board. The government is ready to roll out capital support and also extend the PLI (Performance Linked Investment) Scheme that has paid rich dividends in providing impetus to manufacturing in other sectors.

Senior Indian officials have reportedly got in touch with the top decision making personnel of chip companies and the talks are said to be progressing in a promising manner.

“All efforts will be made to formulate an attractive and investment-conducive scheme for companies looking at India,” the newspaper report quoted a top Indian government official as saying.

The Indian government has already held a top-level meeting with the top brass of relevant stakeholders in its various Ministries on the subject.

But it may not be smooth sailing for India

While India wooing global chip-making biggies is one thing and them committing to big billions of investments is another. Semiconductor making involves big budgets, and India is also up against competition as even countries like the US are said to be luring chip-makers to increase their investments there.

Also, chip-making industries need continuous electric supply and copious amounts of clean water. In India, the latter is a bit iffy as there is water shortage even for basic human living in its cities and villages.

Also, there is also the fundamental question as to whether India has woken up to the problem a bit late in the day. Assuming that even if it signs a contract with any of the top companies this month, the manufacturing process will take at least take 18 to 24 months to get going. That is close to two years. By then the chip crisis may have abated, hopefully.

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