Ya'll Nibbiars The Chip manufacturing requires tons and tons of water, primarily because of repeated rinse operations between every 2 process steps of which there are very very many. And an ultra paranoia of contamination class 10 clean rooms, which rules out water reuse. Large parts of India have a water shortage. Indeed, water is a luxury in India. If at all, Kerala and Assam are the only states I feel which have abundant water. But then Kerala has other problems, viz. a history of rebellious workforce. Assam is probably geographically disadvantaged.
Secondly, chip manufacturing needs top class infrastructure in terms of power and transportation. Automobile manufacturing, which has successfully come up in India, is different in the sense that automobile manufactured products are shipped to end users. End users can wait for delayed delivery if there is a disruption of supply for a few weeks. But semiconductor chips are 99% of the time shipped to other OEM integrators board level manufacturers. These guys have tight supply and demand schedules, and they’d go bust if chips reach them late. Eg.: A motherboard manufacturer.
Why do I say chips could reach the OEM integrator late specifically in India?. Well, what else can you expect when you have bandhs and rasta rokos for anything and everything like the farm laws protest, for example?. Or antiquated road/rail infrastructure compared to the developed world road is improving, but not there yet?. The Chip design is our forte, and I think India just needs to milk that cow to the hilt. We’ve missed the chip manufacturing bus for good, having been late by about 4 decades. At the end of the day, a manufacturer won’t set up a plant just for the heck of it. He needs to see benefit in it. And from what I see, manufacturers don’t see a benefit in chip manufacturing in India.
We should incentivise board level manufacturing, assembly and sort test, and chip packaging like Malaysia. These are easier targets though the challenge around bandhs vis-a-vis supply to OEM integrators still remains. We've missed the chip manufacturing bus for good, being a good 4 decades late to the party, and yet stuck with governance issues that totally rule out chip manufacturing. Oh, and I forgot to mention cost. Cutting edge fabs nowadays cost about Rs 40,000 crore to set up.