Gujarat in talks with chipmakers in Japan, US, South Korea as PM Modi eyes chipmaking hub

With an aim to become a chipmaker for the world, the Gujarat government is in talks with chipmakers in Japan, South Korea and the United States for potential investments in the state. Gujarat has also held talks with Foxconn over a semiconductor plant, and U.S. memory chip firm Micron Technology Inc is also building a chip assembly and testing facility in the state. Semiconductor manufacturing is a crucial element of Prime Minister Narendra Modi’s business initiatives, but initial attempts to provide $10 billion in incentives to the chipmaking industry have faced challenges, with some proposals encountering delays or cancellations. Chief Minister Bhupendra Patel said in an interview with Reuters that Gujarat, Modi’s home state and a significant industrial hub, has engaged in investment talks with chipmakers and officials have visited Japan to meet executives in the chips industry. “We continue to hold investment talks with semiconductor companies in Japan, South Korea and the U.S.,” he said, without disclosing the names of the companies citing “non-disclosure agreements”. 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 (VDAN.NS) have since decided to go solo, and billionaire Mukesh Ambani’s Reliance Industries (RELI.NS) is also exploring opportunities. 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. With inputs from Reuters.