Indian Prime Minister Narendra Modi showed up at the SemiconIndia on Friday, where he met with the CEOs of well-known US semiconductor companies.

India, the world's fifth-largest economy, aspires to be a top semiconductor producer like the US, Taiwan, and South Korea. Business leaders at the event hailed India's expanding technological sector.

SEMI CEO Ajit Manocha and executives from Applied Materials, AMD, Micron, and Cadence attended.

In his keynote address, Ajit Manocha voiced optimism in India's semiconductor industry, noting that domestic policy, geopolitics, and private sector capabilities are now to India's advantage, as reported by CNBC. He described the year 2023 as a turning point in India's aspirations in the semiconductor industry.

The event's importance stems from India's ambitions to establish itself as a significant semiconductor center. The two main components of the nation's chip strategy are luring international businesses to invest and set up operations there and developing ties with other significant semiconductor producers, especially the United States.

In December, the Indian government launched a $10 billion incentive scheme for semiconductor companies worldwide. Moreover, India's semiconductor connection with the United States was enhanced by Prime Minister Modi's recent visit.

The American chip companies at SemiconIndia highlighted their investments in India and launched new initiatives, demonstrating India's attraction as an investment location for international firms.

Major Companies to Invest in India

AMD plans to invest $400 million in India over five years, TechCrunch reported. The major chip manufacturing company aims to build its largest design facility in Bengaluru to help India become a semiconductor leader.

CTO Mark Papermaster unveiled these investment plans at the SemiconIndia 2023 conference, including the opening of 10 offices in India with the 500,000-square-foot design center.

Prime Minister Narendra Modi also met with Micron Technology's president and CEO, Sanjay Mehrotra. Micron thanked Prime Minister Modi for pursuing the goal of making India a global semiconductor hub and pledged to improve the Indian semiconductor manufacturing environment.

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Before PM Modi's visit to the United States, Micron Technology revealed its investment intentions and committed up to $825 million to construct a new semiconductor assembly and testing plant in India.

The project at Gujarat's SANAND Industrial Park is anticipated to provide around 5,000 direct employment and an additional 15,000 jobs for the country, according to Devdiscourse.

India Facing Challenges in The Sector

The high-profile event may overshadow India's semiconductor sector struggles.

Pranay Kotasthane, deputy director of the Takshashila Institution, thinks India can succeed in semiconductor packing and testing, which involve low-skilled labor but large capital investments.

According to Kotasthane, contradictory rules and hefty import duties may explain why significant Taiwanese enterprises have yet to enter this sector.

India has needed help finding appropriate technical partners for starting up operations in the foundries sector, the firms in charge of semiconductor fabrication.

In the case of the Vedanta and Foxconn chip manufacturing partnership, STMicroelectronics, a European semiconductor company, purportedly provided the technology.

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