Can India be a player in the computer chip industry?

BBC:

A reliable supply of computer chips is essential for Arnob Roy, the co-founder of Tejas Networks.

His company, based in Bangalore, India, supplies the equipment behind mobile phone networks and broadband connections.

“Essentially, we provide the electronics that carry traffic across telecom networks,” he says.

That requires special chips designed for telecoms tasks.

“Telecom chips are fundamentally different from consumer or smartphone chips. They handle massive volumes of data coming simultaneously from hundreds of thousands of users.

“These networks cannot go down. Reliability, redundancy and fail-safe operation are critical – the chip architecture has to support that,” Roy says.

Tejas designs many of those chips in India, a country well known for its expertise in designing computer chips (also known as semiconductors).

It’s estimated that 20% of the world’s semiconductor engineers are in India.

“Almost every major global chip company has its largest or second-largest design centre in India, working on cutting-edge products,” says Amitesh Kumar Sinha, Joint Secretary of India’s Ministry of Electronics and Information Technology.

What India lacks is companies that manufacture semiconductors.

So Indian firms like Tejas Neworks design the chips they need in India, but then have them manufactured overseas.

The weakness of that system was exposed during Covid, when the supply of chips dried up and companies in all sorts of industries had to scale back production.

“The pandemic made it clear that semiconductor manufacturing is too concentrated globally, and that concentration carries serious risk,” Roy says.

That spurred India to develop its own semiconductor industry.

“Covid showed us how fragile global supply chains can be. If one part of the world shuts down, electronics manufacturing everywhere is disrupted,” says Sinha.

“That’s why India is developing its own semiconductor ecosystem to reduce risk and increase resilience,” he adds.

He is leading government efforts to develop the semiconductor industry, which involves identifying parts of the production process where India can compete.