Being Chipper

India is finally entering the chip-making business in a big way

Computer chips, also called semiconductors, are becoming one of the world’s most important products. In fact, experts say that by 2030, the world could sell more chips every year than oil. Until recently, India was not seen as a country that actually made chips. But that may now change.

Last Saturday, Tata Electronics signed a deal with a Dutch company called ASML. This is a very big step for India’s chip industry. ASML makes the special machines used to produce computer chips. These machines are so advanced that only ASML can make them.

India already plays an important role in the chip world, but mostly behind the scenes. Many Indian engineers help design chips for global companies. In fact, about one in every five chip designers in the world is Indian. India is also good at testing and packaging chips after they are made.

But making the chips themselves is much harder. That is what Tata now plans to do at its new factory in Dholera, Gujarat. Tata will invest about $11 billion in the project.

The factory will not make the world’s most advanced chips used in top smartphones and AI systems. Instead, it will make older and more reliable chips. These chips are used in cars, factory machines, household appliances and many everyday devices.

That may not sound exciting, but these “mature” chips are extremely important. If there are not enough of them, factories and car companies can slow down or even stop production. During the Covid pandemic, chip shortages caused major problems around the world.

Right now, many big chip companies are focusing on making expensive AI chips. That could create shortages of these older chips again. Countries like China are already increasing production, and India wants to take advantage of the opportunity too.

Tata also plans to use larger silicon wafers, which means it hopes to make chips in very large numbers. The Indian government wants most of the chips used in India to eventually be made inside the country. That would save foreign exchange, create jobs and show that India is serious about becoming a global chip-making power.

END OF ARTICLE