At the SEMICON India conference, Applied Materials announced a $5 billion investment over the next decade to build a 140-acre research park in Bengaluru and scale its Indian supply chain tenfold by 2035. The expansion comes as India positions itself as a trusted manufacturing alternative amid US-China trade tensions and rising AI-driven chip demand. While India has committed $21 billion in incentives, the country has yet to produce a chip from a large-scale fab, with Tata Electronics' Gujarat plant delayed by nearly two years.
Applied Materials $5 billion investment
- ▪Applied Materials plans to build a 140-acre advanced semiconductor research park in Bengaluru, which will include cleanrooms and engineering infrastructure for technology testing
- ▪Applied Materials announced a plan to invest $5 billion in India over the next decade to expand its semiconductor research and development, supply chain, and workforce
- ▪Applied Materials aims to scale its India-based supply-chain capacity tenfold by 2035 and expand its operations beyond Bengaluru to Chennai, Mumbai, and Gujarat
- ▪Applied Materials plans to more than double its research and development workforce in India, which currently stands at more than 7,000 employees, as part of Applied Materials' India Vision 2035 programme
Global chip capacity scramble
- ▪The global semiconductor industry is experiencing a scramble for production capacity driven by surging computing demand for artificial intelligence
- ▪The global scramble for chip production capacity has been sharpened by rising demand for advanced chips alongside artificial intelligence and data-centre infrastructure
Geopolitical semiconductor tensions
- ▪Washington and Beijing have imposed tit-for-tat export restrictions on semiconductor technology, prompting India to position itself as a trusted partner for companies diversifying from Taiwan and China
- ▪Prime Minister Narendra Modi stated that the world stands in utmost need of new and reliable manufacturing locations, and India is continuously preparing itself for this role
SEMICON India conference
- ▪Twelve projects have been approved under India's semiconductor incentive program in the past five years, and three chip-packaging plants have begun commercial production
- ▪The SEMICON India conference held in New Delhi in September drew more than 600 companies and representatives from 52 countries to showcase India's semiconductor ambitions
Tata Electronics fab delays
- ▪Commercial production from the marquee $10 billion Tata Electronics fabrication plant in Gujarat has been delayed by nearly two years
- ▪Despite India's semiconductor push, the country has yet to produce a single semiconductor chip from a large-scale fabrication plant
Debatable claims
- ▪India's multi-billion dollar semiconductor subsidies are a justified economic investment
- ▪India is a viable alternative to China and Taiwan for semiconductor manufacturing
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