In a move that has sparked discussions about India’s strategy in becoming a global chip superpower, Chinese telecom giant Huawei recently released the Mate 60, a 5G capable phone. While phone companies constantly release new models, the significance of this particular release lies in Huawei’s role as a company that fosters indigenous capabilities in the telecom value chain. With its own R&D expenditure accounting for a substantial portion of its turnover, Huawei has become a key player in the global market.
However, Huawei has faced restrictions from the US government, which has convinced its allies to follow suit. These restrictions have led to Google withholding its Android operating system from Huawei. In response to growing tech sanctions imposed by the Biden administration, Huawei released the Mate 60 with a chip featuring 7-nanometre circuitry. Comparatively, the most advanced chipmaker in the world, Taiwan Semiconductor Manufacturing Corporation, is set to release a 3-nanometre chip for the latest iPhone.
This raises questions about India’s chipmaking capability and its dependence on international powers for key technologies. To overcome this, India should focus on developing chipmaking equipment and technology independently, as demonstrated by the success of a Chinese startup in producing a 20-nanometre chip using homegrown technology and equipment. Rather than attracting established chipmakers to set up shop in India, the country should allocate funds to support a range of startup companies focused on developing different aspects of the chipmaking ecosystem.
There are several reasons why India should prioritize chip independence. Firstly, the import bill for chips can be a significant drain on foreign exchange, potentially exceeding the oil import bill. Secondly, domestic production of chips ensures a steady supply and reduces the risk of disruptions caused by global trade disruptions like the COVID-19 pandemic. Lastly, having a domestic fab provides insurance against denial of advanced chips on geopolitical grounds.
As an important partner in the Quad alliance and a counterweight to China’s power, India may feel secure in terms of technology access. However, it is crucial to consider the role of partisan politics in the US, as a Republican or Democratic Congress may deny India access to key technology purely for political reasons. To avoid being hostage to passing political whims, India must nurture strategic autonomy by developing its own chipmaking capabilities.
India possesses the engineering talent and entrepreneurial energy required to achieve this goal. However, what has been lacking is the generous funding necessary to support a large number of startup ventures. The government should shift its approach from subsidizing established foreign players to funding and nurturing domestic startups across the entire chipmaking ecosystem. Even if only a few of these startups succeed, it would be enough to establish India as a chipmaking powerhouse.
Sources:
– TK Arun, Senior Journalist
Definitions:
– Chipmaking: The process of manufacturing microprocessor chips, which are essential components in electronic devices.
– 5G: The fifth generation of wireless technology, providing faster speeds and better connectivity.
– Telecom: Short for telecommunications, which refers to the transmission of information through various communication devices and technologies.
– Microprocessor: An integrated circuit that contains the functions of a central processing unit of a computer or other electronic device.
– R&D: Research and Development, the process of developing new technologies and products.
– Subsidies: Financial assistance or support provided by the government to promote economic activities or industries.
– Fab: Short for fabrication unit, refers to a facility where semiconductor chips are manufactured.