The burgeoning demand for smaller, more efficient chips presents a golden opportunity for domestic fabrication plants in India, particularly in the mobile device industry. With the majority of smartphones requiring chips in the 10-14 nanometer (nm) range, mobile makers could emerge as a lucrative market for local chip manufacturers.
In the fiscal year 2023, mobile manufacturers in India imported chips worth $9-10 billion, reflecting a significant portion of the $22-24 billion semiconductor demand in the country. The need for smaller and more efficient chips is particularly pronounced in the mobile device sector, constituting nearly half of the total semiconductor demand.
The upcoming Tata fab plant in Dholera, Gujarat, is set to address this demand by starting production with chips of 28 nm and above, initially targeting industries like automotive. However, officials in the Ministry of Electronics and Information Technology indicate that production is expected to evolve to include smaller chip sizes in the 10-14 nm range.
The shift towards smaller chips is driven by the ever-increasing demand for sleeker and more powerful smartphones. These chips enable devices to perform complex tasks while consuming less power and taking up less space, making them essential components for modern mobile devices.
By catering to the mobile device industry, domestic fabrication plants have the potential to significantly reduce India’s reliance on imported chips while boosting the country’s manufacturing capabilities. Mobile makers, in turn, could benefit from a stable and localized supply chain, reducing the risk of disruptions due to global supply chain challenges.
Moreover, a focus on domestic chip manufacturing aligns with the Indian government’s initiatives such as “Make in India” and “Atmanirbhar Bharat,” aimed at promoting self-reliance and fostering indigenous manufacturing capabilities.
As the demand for smartphones continues to rise, driven by factors like increasing digital penetration and evolving consumer preferences, the need for smaller, more efficient chips will only grow. This presents an immense opportunity for domestic fabrication plants to capitalize on the demand from mobile makers and establish themselves as key players in the semiconductor industry.
However, achieving this goal will require concerted efforts from both government and industry stakeholders. The Ministry of Electronics and Information Technology must provide necessary support in terms of policy frameworks, incentives, and infrastructure to encourage investment in chip manufacturing.
Furthermore, mobile makers need to collaborate closely with domestic fabrication plants to ensure that the produced chips meet their specifications and quality standards. This partnership can foster innovation and customization, leading to the development of chips tailored specifically for the Indian market.
In conclusion, the emergence of a market for 10-14 nm chips presents a significant opportunity for both mobile makers and domestic fabrication plants in India. By leveraging this opportunity, the country can strengthen its semiconductor ecosystem, reduce dependence on imports, and establish itself as a global player in chip manufacturing.
