By AFP and Focus | 2025-10-07

NEW DELHI -- When Prime Minister Narendra Modi declared India's "late entry" into the global semiconductor race, he pinned hopes on pioneers such as Vellayan Subbiah to create a chip innovation hub.

The chairman of CG Power, who oversees a newly commissioned semiconductor facility in western India, is seen as one of the early domestic champions of this strategic sector in the world's fastest-growing major economy.

"There has been more alignment between the government, policymakers and business than I've ever seen in my working history," Subbiah, 56, told AFP.

"There's an understanding of where India needs to go, and the importance of having our own manufacturing."

As global trade dynamics continue to shift and introduce uncertainties, Modi has doubled down on self-reliance in critical technologies.

New Delhi, which flagged its push in 2021, has this year approved 10 semiconductor projects worth about $18 billion in total, including two 3-nanometer design plants.

Commercial production is slated to begin by the end of the year, with the market forecast to jump from $38 billion in 2023 to nearly $100 billion by 2030.

Subbiah, whose CG Power is one of India's leading conglomerates, predicts "over $100 billion, if not more," will flow into the industry across the value chain in the next five to seven years.

"Symbiotic" public-private partnerships are "very exciting," he said.

'Ability to accelerate'

Chips are viewed as key to growth and a source of geopolitical clout.

India says it wants to build a "complete ecosystem" and break the global supply chain dominance by a few regions.

The government has courted homegrown giants such as Tata, alongside foreign players like Micron, to push design, manufacturing and packaging in joint ventures.

CG Semi, a joint venture with CG Power, plans to invest almost $900 million in two assembly and test plants, as well as to push its design company.

"We are looking to design chips, so that we can own the (intellectual property) too -- which is very important for India," said Subbiah, a civil engineer by training with a master's in business administration from the University of Michigan.

Still, critics say India is decades late starting, and remains far behind chip leaders in Taiwan, the Netherlands, Japan and China.

"First we have to recognize there is a gap," Subbiah said, noting Taiwan's TSMC has a 35-year head start.

Taiwan-India partnership

The drive for a self-sufficient ecosystem is bolstered by deepening ties with Taiwan. Indian Ministry of Electronics and Information Technology Secretary S. Krishnan attended the SEMICON Taiwan trade fair in September to develop this partnership.

Following the success of Taiwanese giants like Foxconn and Pegatron in India, the cooperation has reached a major milestone. Tata Electronics is partnering with Powerchip Semiconductor Manufacturing Corporation to establish India's first 12-in. (300mm) wafer fabrication plant in Dholera, Gujarat state.

This cooperation is critical to diversifying the global high-tech value chain. Krishnan highlighted India's potential, noting the country serves as "a big market" and "a source of human resources," according to the Taipei Times.

India has a massive young workforce, with 566 million inhabitants under the age of 25. This key asset is vital to achieving the national goal of embedding an India-made chip in every device worldwide.

Competing with China on costs

"Twenty percent of the global talent in semiconductor design comes from India," said Modi in September.

But wooing talent who sought opportunities abroad back to India remains a challenge, even after recent changes to the US H-1B worker visa program, which is heavily used by Indians.

India, the world's fifth-largest economy, still struggles with bureaucratic inertia and a lack of cutting-edge opportunities.

Subbiah acknowledged that his own venture employs about 75 expatriates.

"That's not the way we want to grow. We want to grow with Indians," he said, calling for policies to lure back overseas talent. "How do we bring these people back?"

New Delhi now covers up to 50% of costs for all chip fabrication units, regardless of chip node, with similar support for testing and packaging.

The geopolitical situation and the need for strong international backing make this path tougher than in 2021, when New Delhi first pushed for chip self-sufficiency.

Yet Subbiah remains upbeat for the long run.

"There are only going to be two really low-cost ecosystems in the world: one's in China, and the other one's going to be in India," he said.

"You're going to see the center of gravity move towards these ecosystems, so if you start thinking about a 25-, 30-year regime, it's definitely going to happen."

"The coming 3-4 years is pivotal for advancing India's semiconductor goals," Sujay Shetty, managing director of semiconductor at PwC India, told CNBC in September.

This period will determine whether the country can move from incentive-driven announcements to fully operational and technologically resilient fabrication plants, he said.