India Commits $18.2 Billion to Build Domestic Semiconductor Ecosystem

India has approved $18.2 billion in funding for 10 semiconductor projects as part of its 'Semiconductor Mission,' aimed at reducing reliance on foreign chip suppliers. The MOVE follows U.S. restrictions on high-end AI chip exports to China in 2022, sparking a global scramble for semiconductor self-sufficiency.

The investment includes two fabrication plants and several testing and packaging facilities, with the goal of creating an end-to-end domestic supply chain. India, one of the world's largest electronics consumers, currently plays a negligible role in chip manufacturing.

Stephen Ezell of the Information Technology and Innovation Foundation cautions that incentives alone won't attract chipmakers. 'India needs more than a few fabs or ATP facilities—more than a few shiny objects,' he said, noting the country must address systemic issues like tax policy and infrastructure.

The government also launched a new electronic components support program in May to stimulate local demand, addressing previous gaps in production capabilities for parts like camera modules and screens.