New Delhi: New companies are likely to invest in India to manufacture memory chips while existing investors will scale up production to address the demand-supply gap in the segment, Union minister Ashwini Vaishnaw said in an interview to PTI.
Strong demand for memory (data storage) cards and advanced chips has tightened global supplies and supported higher prices in past quarters, and manufacturers have been sprucing up investments and production capacities to meet market requirements worldwide. The higher memory chip prices have, in turn, led to a rise in production costs for a range of electronic products, including smartphones and laptops.
“Definitely, a lot more investment is coming in the memory manufacturing units, and that is because for the first time in the way the semiconductor industry has grown at such a rapid pace, for the first time we are seeing a huge shortage of certain components which are required in the AI data centres, the high bandwidth memory chips,” Vaishnaw said.
The minister noted that India is emerging as an important destination for semiconductor investments as global manufacturers seek to expand production capabilities amid rising demand.
According to industry estimates, investments in India’s data centre sector are expected to exceed USD 200 billion in the coming years, creating substantial demand for advanced memory and storage solutions.
Vaishnaw pointed to the operations of Micron Technology, which began commercial production in India earlier this year, as evidence that efforts to strengthen the domestic semiconductor ecosystem are already yielding results.
He said the shortage of memory chips remains a global phenomenon and that both new investors and existing manufacturers are likely to participate in capacity expansion.
When asked whether future growth would come from new entrants or current players, the minister replied that both possibilities appeared likely.
Highlighting the government’s semiconductor roadmap, Vaishnaw said the India Semiconductor Mission (ISM) 2.0 is in an advanced stage of planning and will place significant emphasis on semiconductor design and manufacturing equipment.
Under the next phase of the programme, the government intends to encourage global equipment manufacturers to establish both design and manufacturing operations in India.
He also said that indigenous production of specialised chemicals and industrial gases used in semiconductor fabrication would be a priority under the expanded mission.
The minister noted that ISM 1.0 helped lay the foundation for India’s semiconductor ambitions by attracting major investments and supporting nearly 48 startups engaged in semiconductor and technology development.
“Design will be the topmost priority in ISM 2.0. The second major focus area will be machines and equipment used in semiconductor manufacturing,” he said.
Vaishnaw added that the government would continue promoting the establishment of additional fabrication plants and Assembly, Testing, Marking and Packaging (ATMP) units while expanding efforts in talent development.
Speaking about India’s growing appeal as a data centre hub, the minister identified three key advantages: a large pool of skilled professionals, a modern and robust power transmission network, and abundant renewable energy capacity.
He said more than two lakh kilometres of transmission lines have been built in the past decade, significantly strengthening India’s power infrastructure.
According to Vaishnaw, nearly half of the country’s installed power generation capacity now comes from renewable energy sources, making India an attractive destination for global hyperscale data centre operators.
The minister also addressed environmental concerns surrounding the sector, stating that strict regulatory standards are being followed and that technological innovations are helping reduce water and energy consumption.
He said newer cooling technologies can cut water usage by nearly 70 per cent, helping improve the sustainability of large-scale data centre operations.
Industry studies estimate that water consumption by data centres in India could rise from about 150 billion litres in 2025 to more than 358 billion litres by 2030, underscoring the importance of sustainable infrastructure planning as the sector expands.
