Made-in-India chips are becoming a significant focus for Apple as the tech giant looks to diversify its supply chain and ramp up iPhone production in India.
With negotiations underway, Apple is in talks with Micron, Tata Group, and other key semiconductor manufacturers to secure $12 billion worth of chips that are made in India, aiming to source them for iPhones produced in the country. This marks a major shift in the company’s strategy, as it seeks to increase its production capacity outside of China.
The importance of securing these Made-in-India chips lies in Apple’s growing presence in India, with projections showing that by 2026, 26% of its global iPhone production could be based in the country.
As India emerges as a critical hub for technology manufacturing, Apple’s commitment to using locally produced semiconductors will provide a massive boost to the domestic semiconductor industry, helping India establish itself as a global player in this sector.
Apple’s Growing Semiconductor Demand
As one of the world’s largest consumers of semiconductors, Apple’s demand for chips has surged over the years. From 2011 to 2022, the company’s global semiconductor consumption skyrocketed from $18.8 billion to over $67 billion, and currently stands at around $72 billion.
This demand stems from the diverse range of high-end products Apple manufactures, including iPhones, iPads, Macs, Apple Watches, and AirPods. Each of these devices relies on the sophisticated and critical components provided by semiconductors.
By securing Made-in-India chips, Apple aims to not only meet this growing demand but also reduce its reliance on overseas suppliers, particularly in China.
The tech giant’s shift toward Indian production follows its broader strategy of expanding manufacturing capabilities outside of China, where 100% of its iPhones were once produced. This diversification is crucial in light of geopolitical tensions and disruptions in global supply chains.
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The upcoming semiconductor units by Micron and Tata Group in Gujarat and Assam, respectively, are set to play a pivotal role in Apple’s plans. If these facilities are able to produce the grades of semiconductors required by Apple, the tech company will become one of the largest buyers of Made-in-India chips, further solidifying India’s position in the global semiconductor industry.
India’s Semiconductor Push
India’s government has been actively promoting domestic semiconductor production, recognizing the importance of developing a robust ecosystem. In 2022, the government launched a Rs 76,000-crore incentive scheme aimed at bolstering the local semiconductor and display manufacturing ecosystem.
The initiative has already approved five major projects worth Rs 1.5 lakh crore, including Micron’s Rs 22,516 crore project in Sanand and Tata Group’s Rs 91,000-crore semiconductor fabrication plant in Dholera.
The Made-in-India chip production push aligns with global trends, as demand for semiconductors is expected to drive a $1-trillion global industry by 2030. Several nations, including India, are vying to establish semiconductor fabs, which will help meet the surging demand for chips in sectors such as defense, aviation, and automotive industries.
However, no single company is likely to match Apple’s substantial investment in India’s chip manufacturing sector, making the tech giant’s commitment even more critical for the industry’s future.
The government’s support through fiscal incentives, which cover up to 50% of project costs, has attracted global players to set up semiconductor manufacturing units in India.
However, with only Rs 10,000 crore remaining under the current scheme, there is growing pressure on the government to increase the outlay and ensure continued development of India’s semiconductor ecosystem. Apple’s Made-in-India chip initiative could help drive more foreign investment into this growing sector.
The Future of Made-in-India Chips
With Apple’s ongoing negotiations with Micron, Tata Group, and other semiconductor manufacturers, the company is poised to make India a key hub for its chip sourcing. The Made-in-India chip strategy is expected to create a ripple effect across the industry, with Apple’s substantial investment offering a significant business opportunity for domestic manufacturers.
In addition to the tech sector, other industries, including defense, aviation, and automotive, are expected to drive demand for locally manufactured chips. While these sectors will likely become substantial buyers of semiconductors, Apple’s investment remains unmatched in scale and importance.
By 2026, when Apple is projected to shift 26% of its global iPhone production to India, the demand for Made-in-India chips will reach its peak, further reinforcing India’s role as a semiconductor production leader.
As India strengthens its semiconductor manufacturing capabilities, this move will also reduce the country’s dependence on imported chips, which has been a major challenge in recent years. By fostering an ecosystem for Made-in-India chips, India is taking a significant step toward becoming a global semiconductor powerhouse.
The global semiconductor market is already on a trajectory to become a $1-trillion industry by 2030, and Apple’s push for Made-in-India chips positions India to play a vital role in this future.
The combination of government incentives, private investment, and the support of major players like Apple will drive innovation and growth in India’s tech manufacturing sector, providing a sustainable foundation for the country’s semiconductor ambitions.
Apple’s commitment to sourcing $12 billion worth of Made-in-India chips underscores its long-term strategy to diversify its supply chain and reduce its reliance on foreign manufacturers.
As the tech giant continues to expand its production capacity in India, the demand for locally produced semiconductors will only increase, providing significant opportunities for domestic manufacturers like Micron and Tata Group.
India’s semiconductor industry is set to become a key player in the global market, driven by investments from Apple and the support of government initiatives.
With the demand for semiconductors expected to rise sharply in the coming years, the Made-in-India chip initiative will be crucial in helping India meet both domestic and global demand, solidifying its place as a leader in the semiconductor industry.
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