AMD backs chip manufacturing in India

World’s second largest computer chip manufacturer AMD is endorsing make in India in a big way by partnering with India's first upcoming chip manufacturing plant in Gujarat.

US-based AMD, which does not own any chip manufacturing plants across the world, has partnered with Hindustan Semiconductor Manufacturing Corporation (HSMC) to help kickstart fabrication in India.

HSMC is leading a consortium of companies that include ST Microelectronics and Silterra Malaysia and have been given approval by the Centre to set up a chip manufacturing unit in Prantij near Gandhinagar in Gujarat to make chips for everything right from PCs, mobile to smart watches. The project is expected to cost upwards of ₹30,000 crore.

After delays of over four years, HSMC recently received its first seed investment of ₹700 crore for the project from Mumbai-based Next Orbit Ventures. With AMD backing it, it has also bagged its first large customer even before it starts building the massive factory. Another consortia led by Jaiprakash Associates, which partnered IBM and Tower Semiconductor of Israel to start chip manufacturing in UP, is yet to find investors.

In an exclusive interview with BusinessLine , AMD President and CEO Lisa Su said local chip manufacturing can be very important for India, “There are significant strategic reasons to invest in manufacturing. We want to support the ecosystem in its entirety. So from a design perspective, our philosophy is not to look at India for cost arbitrage. We would like to do end to end design in India. We’ve invested for many years and so at some point to do end to end product in India is very much a possibility. And for that you require the manufacturing infrastructure as well,” Su said.

AMD's support for local manufacturing comes in sharp contrast to its larger rival Intel, which in a previous interview with BusinessLine , said it will be a mistake to invest in chip manufacturing in India.

“India should not focus on manufacturing microprocessors in the country as there’s already overcapacity in the space globally. Instead, chip design is an area that’s closer to India’s skill base and that’s where we can lead the world. Even China aspires to be there,” Intel India President Kumud Srinivasan had said in February.

AMD, however, feels there's enough opportunity to manufacture in India.

“I don't think there is overcapacity in the market. It depends on what product lines you're in and how you optimise. The idea is that the end to end infrastructure will hopefully also stimulate more indigenous use of the technology and that ends up becoming a win-win,” Su said.

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