India should own chip designs, not just host foreign fabs: Misra

Amaravati: India should leverage its rapidly expanding data centre ecosystem and growing semiconductor investments to build at least one globally competitive, Indian-owned chip company within the next five years, rather than remain primarily a destination for manufacturing facilities and chip design operations owned by overseas firms, Karthikeya Misra, Secretary to the Andhra Pradesh Chief Minister, has said.

In an article outlining India's semiconductor ambitions, Misra argued that the country's growing role in the global artificial intelligence and data centre ecosystem presents an opportunity to move beyond providing land, power, water and customers for foreign technology companies to owning chip designs, intellectual property and technology.

Global cloud companies are expected to spend more than $600 billion this year on AI data centres and associated chips, with a significant part of the infrastructure expansion taking place in India. The country's data centre capacity is expected to multiply by 2030. However, much of the hardware powering these facilities will continue to be designed in the US, manufactured in Taiwan and packaged elsewhere in Asia, he noted.

From manufacturing to ownership

The India Semiconductor Mission (ISM), launched in December 2021, has approved 12 projects across six states involving investments of Rs 1.64 lakh crore. Three units have started shipping commercially manufactured chips, while India's first chip fabrication facility at Dholera is expected to become operational in 2028.

The Centre approved ISM 2.0 in July, with an outlay of Rs 1.275 lakh crore, covering equipment, materials, domestic chip design capabilities and skill development.

While these investments are laying the foundation for a domestic semiconductor ecosystem, India is yet to develop a globally scaled chip company that owns its designs and commercialises its technology.

Misra cited NVIDIA as an example of how intellectual property, software and customer relationships can create enormous value without owning manufacturing facilities.

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