Holding the chips to ready, semi, go

India is set to produce its first indigenous semiconductor chip by September-October, marking a significant step for Indian manufacturing. The Tata-PSMC joint venture in Gujarat will validate India's readiness in chip-making and draw advanced semiconductor technology to the country. India aims to establish a niche in the global semiconductor market, competing with global players like the US.

The country is a few months away-September-October, according to Union electronics and IT minister Ashwini Vaishnav-from producing its first indigenous semiconductor chip. If the tryst with this 'Make in India' timeline is kept, it should be a coming-of-age moment for Indian manufacturing. Semiconductors are vital for self-reliance in modern industry. Once chips start rolling out of the Tata-PSMC JV plant in Dholera, Gujarat, India would have established the ecosystem for making more sophisticated ICs. Other chip industry ventures in the country deal with assembly, packaging and testing facilities. So, the crucial test is about the Tata-PSMC commercial fabrication unit. Commencement of production would validate India's policy and infra-readiness in chip-making. Questions have been raised about both in the past. Soon, it'll be about proof of execution.

India should be able to draw in “advanced semiconductor technology”, a specialised talent pool and network of suppliers. This should mesh with its plan to expand its presence in a rapidly growing global market for semiconductors. India's plans are ambitious, considering other countries have taken decades to develop the tech and ecosystem that enables them to dominate the chip-making industry. Tech transfer from Tata's Taiwanese partner is crucial to enable the Indian firm to clamber up the value chain.

“Taiwanese chipmakers”, , on their part, are seeking to diversify their production base, and India offers a promising market. But the chip industry is a demanding one, higher degrees of sophistication coming at progressively incremental costs. State support is usually provided to develop domestic capacity. India is competing with countries like the US. India will have to establish a niche in the global semiconductor market before aspiring to self-reliance across the spectrum needed by modern industry. Support commitment will have to be generous and enduring. It will also mean India has to stay on the right side of the strategic fault lines emerging in the chip industry.