India’s Gujarat state is looking to win investment from chipmakers in Japan, South Korea and the United States as it bids to become the world’s leading semiconductor hub.
Semiconductor manufacturing is one of Prime Minister Narendra Modi’s key business agendas but initial bids to offer $10 billion in incentives to the chipmaking industry have floundered, with some proposals stalled or cancelled.
Now Gujarat, which is Modi’s home state and one of India’s major industrial hubs, has held investment talks with chipmakers, and officials have visited Japan to meet some executives from the chips industry there, Chief Minister Bhupendra Patel told Reuters in an interview.
“We continue to hold investment talks with semiconductor companies in Japan, South Korea and the US,” he said, without disclosing names of the companies citing “non-disclosure agreements”.
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India’s chipmaking ambitions, first laid out in 2021, have suffered setbacks and the country does not yet have any semiconductor manufacturing plants.
Taiwan’s Foxconn backed out of a $19.5 billion chips joint venture with India’s Vedanta, saying “the project was not moving fast enough”. Foxconn and Vedanta have since decided to go solo, and billionaire Mukesh Ambani’s Reliance Industries is also exploring opportunities.
Gujarat has also held talks with Foxconn over a semiconductor plant, and US memory chip firm Micron Technology Inc is also building a chip assembly and testing facility in the state.
Patel’s comments come ahead of the biennial Vibrant Gujarat Global Summit next week in which the state expects to secure investments in sectors including renewable energy, electric vehicles and electronics manufacturing.
The summit is expected to draw a record number of foreign and domestic investors to the western state in what is seen as Modi’s big push to promote investment in the country just months ahead of national elections, in which he will seek a third term.
India is increasingly becoming a sought after investment destination, especially as companies look to diversify their supply chain beyond China.
Tom Bailey, head of ETF Research at HANetf, said India was at an advantage due to its large size and an increasingly educated population.
“The moves are emblematic of the rise of the so-called ‘China plus one’ supply chain diversification strategies of multinationals,” he said.
- Reuters with additional editing by Sean O’Meara
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