India is setting its sights on becoming a significant player in the global semiconductor industry, with ambitious plans to produce indigenous 2nm chips and Nvidia-level GPUs by 2030. This initiative is driven by the need to reduce reliance on imports, mitigate supply chain vulnerabilities, and secure India's technological future. The country's semiconductor market is rapidly expanding and is projected to reach $110 billion by 2030, representing 10% of global demand.
The Centre for Development of Advanced Computing (C-DAC) in Bengaluru is at the forefront of this endeavor, tasked with engineering the cutting-edge 2nm GPU. These GPUs are intended to power indigenous supercomputers, signifying a major leap in India's high-performance computing capabilities. This move is part of the larger India AI mission, a ₹10,372 crore initiative aimed at strengthening AI infrastructure and fostering innovation.
To achieve these goals, the Indian government launched the Semiconductor Mission in 2021, allocating over $10 billion in incentives to encourage the development of a comprehensive semiconductor ecosystem within the country. This includes setting up fabrication, packaging, and design facilities, with a 50% subsidy towards capital costs. Under this plan, substantial progress has been made in attracting investment from credible companies. A joint venture between PCMC (a Taiwan-based foundry, Powerchip Semiconductor) and Tata Electronics has received approval for an $11 billion fabrication facility. While this facility will initially manufacture 110, 55, 40, and 28 nanometer (nm) chips, it lays the groundwork for future advancements. Tata Electronics is also constructing a $3.5 billion plant in Assam for outsourced semiconductor assembly and testing (OSAT).
India's semiconductor ambitions extend beyond CPUs to include GPUs, essential for artificial intelligence, gaming, and autonomous vehicles. The government has announced plans to develop its own GPUs within the next three to four years, aiming to compete globally. To support this, the newly launched India AI Compute portal will provide over 18,000 GPUs through public-private partnerships at subsidized rates.
However, challenges remain. Despite significant investments and initiatives, India's semiconductor output is projected to meet only a fraction of its domestic demand by 2030. The country also faces a shortage of experienced professionals in semiconductor manufacturing. To address this, the Ministry of Electronics and Information Technology (MeitY) is collaborating with IIT Guwahati to develop talent for Tata's upcoming fab in Assam.
The journey to sovereign silicon is being approached in phases. The initial phase (2024-2025) focuses on feasibility studies, research partnerships, and early-stage chip designs. The second phase (2025-2026) involves prototype development, testing, and validation in AI applications. Mass production, deployment, and global competition are the focus of the third phase (2026-2027). India anticipates having its first domestically produced GPUs by 2027.
While the primary focus has been on manufacturing established technology node chips, India is also looking to invest in cutting-edge technologies like 3nm and 2nm chip fabrication. One potential strategy involves establishing a sovereign semiconductor fund to provide long-term capital for semiconductor projects, reducing reliance on foreign investments.
Achieving the goal of indigenous 2nm chip and Nvidia-level GPU production by 2030 requires overcoming technological hurdles, attracting further investment, and nurturing a skilled workforce. While the challenges are considerable, the Indian government's commitment, strategic partnerships, and growing domestic market provide a foundation for realizing its sovereign silicon ambitions.
