Applied Materials to invest $5 billion in India as Modi's flagship chip event kicks off

By Munsif Vengattil

NEW DELHI, Sept 17 (Reuters) - Applied Materials AMAT.O will invest $5 billion in India over the next decade to expand its presence in the country, the US semiconductor equipment maker said on Thursday at SEMICON India, the country's flagship chip conference.

India put its semiconductor ambitions on display at the three-day event in New Delhi that spans chip materials, design, fabrication and packaging, and which has drawn more than 600 companies and representatives from 52 countries.

This year, the industry has been beset by a global scramble for chip production capacity that has been sharpened by surging computing demand for AI and entangled with geopolitical tensions.

While Washington and Beijing have imposed tit-for-tat export restrictions on chip technology, India has cast itself as a "trusted partner", courting companies looking to diversify away from Taiwan and China.

"The world stands in utmost need of new and reliable manufacturing locations. I say with great responsibility that India is continuously preparing itself for this," Prime Minister Narendra Modi said.

India's semiconductor consumption is projected to reach as much as $110 billion by 2030, up from $45 billion to $50 billion in 2025, according to government estimates.

Applied Materials, one of the world's largest semiconductor equipment makers, said its India investment will center on research, supply chain scale-up and workforce growth.

India, which has committed more than $21 billion across two key semiconductor incentive programs, remains a late entrant to the capital-intensive industry that countries like Taiwan have spent decades building.

Twelve projects have been approved under India's incentive program in the past five years, and three chip-packaging plants, including one run by US-based Micron Technology MU.O, have begun commercial production.

India's push, however, has yet to produce a single chip from a large-scale fabrication plant. Commercial production from the mission's marquee project, a $10 billion Tata Electronics fab in the western state of Gujarat, has been delayed by nearly two years.