In a noteworthy session at the Tamil Nadu Global Investor Meet (GIM) 2024, Professor Chris Miller, the author of ‘Chip War: The Fight for the World’s Most Critical Technology,’ cautioned governments against excessive spending to attract semiconductor fabrication plants. Miller emphasized that, given the high cost of fabrication, countries should carefully evaluate their comparative advantage before investing hundreds of millions of dollars.
“Politicians in every country like the ribbon cutting for a fab. But there’s more money made in chip design every year than fabs. While it is good for countries to have a domestic fabrication base, they shouldn’t over-index on fabs,” Miller suggested, shedding light on the financial dynamics of the semiconductor industry.
Moreover, Miller highlighted the significance of focusing on other segments of the chip value chain, stating, “Your marginal dollar is best spent on other parts of the supply chain.” He stressed that chip design, rather than fabrication, holds more promise as a strategic investment.
The Tamil Nadu Semiconductor and Advanced Electronics Policy 2024, announced at the event, revealed that the state government would provide up to 50 percent additional financial incentives to semiconductor projects chosen under the Centre’s $10 billion chip subsidy plan. The policy aims to encourage semiconductor manufacturing in Tamil Nadu.
Additionally, Miller acknowledged India’s strength in chip design, with a deep and skilled labor force. He noted the growth of electronics in the country and the potential for increased interest in assembling and test facilities.
As Taiwan looks beyond its borders for growth opportunities, with many industry executives visiting India, Miller’s insights into the semiconductor landscape provide valuable perspectives for governments and industry stakeholders.
