India Might Soon Get $7.5 Billion Worth Chip Manufacturing Plants

A fresh report from Economics Times suggests that the Government of India is in talks with the Taiwanese government to set up a chipset manufacturing plant in India. Taiwan has one of the world's largest chipset manufacturing plants TSMC, which manufactures CPUs and GPUs for brands like Apple, AMD, and MediaTek.

According to the report, if this deal succeeds, then Indian will have a chipset manufacturing plant, capable of producing processors for 5G devices, smart cars, and more. As of now, the government is analyzing the parameters like land, water, and manpower to set up a chipset manufacturing plant in India.

It is also said that India will be offering 50 percent financial support for the $7.5 Billion worth of chip manufacturing plants starting from 2023 in addition to incentives and tax benefits. The people from Taipei are currently looking for tariff reduction on various products which are a precursor to chip manufacturing.

Though a lot of tech products are now being manufactured/assembled in India, a majority of the chipsets powering these devices are being imported from foreign countries. India currently imports chipsets worth $24 Billion, which is expected to go up to $100 Billion by 2025.

There has been a severe global chipset shortage, which has lead to the halting of car and smartphone manufacturing in India and across the world. The most anticipated budget smartphone -- the JioPhone Next has also suffered from the chipset shortage issue, and the launch has been postponed.

There Are Some Concerns From Taiwan

Though Taiwan has showcased a green signal to set up a chipset manufacturing mega factory in India, the country is actually worried about water supply and electricity. Hence, according to the report, Taiwan is suggesting the Indian Government set up a chip designing sector before entering into the chipset manufacturing business.

Taiwan plays an important role in the world when it comes to chip manufacturing. However, setting up a chip manufacturing fab takes years, and if everything goes well, we can expect to see smartphones and other gadgets powered by a processor that is being fabricated in India.

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