[News] U.S. Equipment Giant Invests USD 1.151 Billion in India

Recently, according to foreign media reports, the U.S. semiconductor equipment giant Lam Research will invest 100 billion Indian rupees (approximately $1.151 Billion) in Karnataka, India.

This news was confirmed by India’s Minister of Electronics and IT, Ashwini Vaishnaw. On social media, he stated, “Our semiconductor journey has reached another milestone: Lam Research announces an investment of over 100 billion rupees in India. This reflects confidence in Prime Minister Modi’s semiconductor vision.”

Reports indicate that this investment is part of Lam Research’s plan to extend its semiconductor equipment supply chain to India. Additionally, Lam Research has signed a Memorandum of Understanding (MoU) with the Karnataka government to lease and eventually purchase a plot of land in Whitefield, Bangalore.

The Three-Pronged Approach Driving India’s Semiconductor Industry

In recent years, India has seized market opportunities to develop its semiconductor industry. In addition to domestic companies such as Tata Electronics, CG Power, and Kaynes Technology increasing investments, numerous international giants—including Micron, Renesas Electronics, Powerchip Semiconductor Manufacturing Corp (PSMC), Tower Semiconductor, Applied Materials, and Tokyo Electron (TEL)—have also committed investments in India.

However, it is worth noting that most of these investments, except for Applied Materials, focus on wafer manufacturing or packaging and testing. For example:

Micron Technology is building a $2.75 billion chip packaging and testing plant in Sanand, India.

PSMC and Tata Group are co-investing 910 billion rupees in a wafer fabrication plant.

Tower Semiconductor plans to invest $10 billion with India’s Adani Group to build a wafer fab in Karnataka.

Renesas Electronics, CG Power, and Thailand’s Stars Microelectronics are jointly investing 76 billion rupees in a packaging and testing facility.

In addition to Lam Research, India has attracted investments from U.S. firm Applied Materials and Japanese semiconductor equipment giant TEL.

In June 2023, Applied Materials announced a $400 million investment to establish a new engineering center in India over the next four years.

In September 2024, TEL signed a strategic cooperation MoU with Tata Electronics to accelerate semiconductor equipment infrastructure development.

The Applied Materials center will be located near the company’s existing facility in Bangalore and could support a planned $2 billion investment. TEL, on the other hand, will provide equipment infrastructure for India’s first wafer fab and an OSAT (Outsourced Semiconductor Assembly and Test) facility. TEL also plans to recruit and train a local team of chip engineers in India by 2026.

Overall, Lam Research is not the first, nor will it be the last, semiconductor equipment company investing in India. In the future, India is expected to strengthen international cooperation and integrate further into the global semiconductor supply chain, enhancing its local industry’s global competitiveness.

Opportunities and Challenges in India’s Semiconductor Development

India has positioned the semiconductor industry as a key economic strategy and has introduced several policies to support its growth, including the India Semiconductor Mission (ISM) and Chips to Startup (C2S) program.

India aims to become one of the world’s top five semiconductor manufacturing nations within the next five years and targets a $500 billion domestic semiconductor manufacturing market by 2030.

As the world’s second-largest mobile phone market, India’s growing consumer demand for electronics drives high demand for semiconductor chips. However, India currently relies almost entirely on imports for chips, with weak local manufacturing capabilities—creating a significant growth opportunity for the semiconductor equipment market.

At the same time, as global semiconductor supply chain tensions persist, many countries are seeking to diversify their supply chains. India, as an emerging market, is likely to attract further semiconductor investments, boosting demand for semiconductor equipment.

Nevertheless, semiconductor equipment remains a capital-intensive, high-tech industry with high entry barriers. India faces challenges such as weak industrial foundations and a shortage of skilled talent.

As Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association, noted, domestic companies’ active participation showcases the vitality and openness of India’s semiconductor ecosystem. However, he also emphasized that while India has laid the groundwork for semiconductor manufacturing, this is just the beginning—there is still a long road ahead.

Currently, India’s semiconductor equipment industry is in its early stages. To fully capitalize on market potential, the Indian government and enterprises must work together to seize opportunities and overcome challenges, ultimately securing a place in the global semiconductor market.

(Photo credit: Lam Research)