India is on its way to becoming a significant centre for semiconductor packaging and assembly, according to Prabu Raja, president of the US company's semiconductor products group. This should establish a solid foundation for the industry, paving the way for the country to proceed into more challenging — and costly — semiconductor manufacturing.
“Packaging is the next big inflection that’s going to happen, it’s the right approach,” Raja said in an interview.
Prime Minister Narendra Modi has spearheaded the drive into semiconductors, including the unveiling of a $10 billion fund nearly two years ago to attract chipmakers. In a broader sense, he has outlined plans to establish a robust tech manufacturing sector branded "Make in India" that has already attracted investments from Apple Inc. suppliers.
Micron Technology Inc., an American memory chip manufacturer, is constructing a $2.75 billion semiconductor assembly and testing facility in Gujarat with financial incentives from the Modi administration. Applied Materials announced last month that it will invest $400 million over the course of four years to establish a new engineering centre in Bangalore. In the city, it already operates a research facility.
Raja stated that while the company will not yet assemble chipmaking equipment in India, the new centre will be used to collaborate with suppliers and partners on the development of new products.
As Washington and Beijing clash over a variety of issues, Modi is leveraging India's geopolitical influence to become an indispensable ally for American tech ambitions. India's aspirations have been aided by the country's reputation as a stable democracy and reliable tech hub.
Modi stated at a conference on Friday in his home state of Gujarat that “The world needs a trusted supply chain, Who could be a better partner than the world’s biggest democracy?”
It has taken decades for industry leaders such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. to develop their semiconductor manufacturing expertise, despite the difficulty and expense involved. Raja stated that India could enter the chipmaking industry by employing packaging techniques, which entail mounting circuits on a silicon substrate or chip.
Raja stated, “The confidence level on India has gone up in the last few years, If you look at global semiconductor ecosystems in Silicon Valley, there are lots of Indians. Companies coming to India are likely to use a combination of talent from global hubs and from India.”
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