Coming from the border skirmishes between India and China last year set many things have been set in motion leading to the ban of several Chinese apps in the country, causing the revival of a homegrown smartphone company, and augmenting the Make in India initiative (and AatmanirBharatha) that encourages companies to do their manufacturing in the nation. Following the integral role the initiative has already played in making the country the second-largest smartphone manufacturer in the world, the government now intends to draw in chipmakers with a lucrative offer.

With the latest report, India is already offering cash incentives of over $1 billion to every company that would be setting up chip fabrication infrastructure within the country. An expected mandate in the near future will also apparently make it compulsory for private companies in India to source their purchasing from these firms, plus the government will also be an active buyer. However, the report doesn't reveal whether this incentive has attracted the eyeballs of any major semiconductor manufacturers yet.

It's a fact that wafer fabrication is not easy as it is a very tedious, time-consuming, and hyper-expensive process, which demands billions of dollars in R&D in terms of investment it seeks. Just for context, the 3nm fab being developed by TSMC is expected to cost upwards of US$ billion. Currently, India doesn't have a commercial fab that could tend to the needs of modern-day computing devices like smartphones, and the current facilities can only offer up to 180nm chips which is a huge gap in terms of the new technological upgrade.

So if India wants to be self-reliant in producing smartphones, and other electronic gadgets, and reduce its dependence on imports, attracting investments from chipmakers is borderline crucial. It is interesting to see whether a billion dollars in incentives would be enough for the giants to go all-in with the offer India is offering.

It is also quite interesting to know how the new fab of TSMC that is planned and being built up in Arizona, USA with an investment of US$ 19 billion.

Below is an informative video about how the global chip shortage has created a ripple effect across the world, including India.