MUMBAI, July 6 — The semiconductor chip, a tiny device made primarily from silicon, remains the foundational component of modern electronics. For India, the global push to reshore chip manufacturing presents a strategic opening.
The industry’s modern history began in 1947 with the invention of the transistor at Bell Labs in the United States. The integrated circuit was co-invented in 1958 by Jack Kilby at Texas Instruments and Robert Noyce at Fairchild Semiconductor.
The U.S. dominated chip design and manufacturing for decades. But by the 1990s, fabrication shifted heavily to East Asia.
That shift was led by Taiwan Semiconductor Manufacturing Company, or TSMC, founded in 1987, and South Korea’s Samsung. These two firms now anchor the global supply chain.
The global chip market was valued at over $500 billion in 2021. Key players include Intel in the U.S., TSMC in Taiwan, Samsung in South Korea, and ASML in the Netherlands.
ASML holds a near-monopoly on the extreme ultraviolet lithography machines essential for advanced chip production. That concentration of technology gives the Dutch firm outsized influence over what gets built and where.
In 2022, the U.S. Congress passed the CHIPS and Science Act, authorizing $52.7 billion in subsidies to boost domestic semiconductor research and manufacturing. The stated aim is to reduce reliance on Asian foundries amid rising geopolitical tensions with China.
Analysts note that this legislation reshapes incentives for companies considering new fabrication plants. India, with its growing electronics assembly sector and engineering talent pool, is positioning itself as an alternative destination.
The ministry has indicated interest in attracting investment from both U.S. and Asian chipmakers. Officials say the government is studying the CHIPS Act model as it designs its own production-linked incentive schemes.
For Indian tech firms that design chips but currently rely on TSMC or Samsung for fabrication, the geopolitical realignment introduces new variables. Supply chain security is now a boardroom concern.
What to watch next: how the $52.7 billion in U.S. subsidies flows to projects and whether India can capture a slice of the high-value fabrication work that may leave Taiwan and South Korea. The semiconductor chip remains tiny. The stakes for Asia are anything but.
