Tokyo Electron Plans India Expansion as PM Modi Pushes for Chip Manufacturing

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Image Courtesy: Tata Electronics

Tokyo Electron Ltd., Japan’s largest chip equipment maker, is gearing up to expand in India, aligning with the Modi government’s efforts to boost semiconductor production in the country. The company plans to build a team of local engineers by 2026, with their primary role being to provide technical services to Tata Electronics Pvt. Ltd., according to CEO Toshiki Kawai. Robotics and support from Japan will be key elements of this strategy, though details on the number of hires have not been disclosed.

India is actively courting global electronics and semiconductor companies as part of Prime Minister Narendra Modi’s plan to close the tech gap with leading economies. Major corporations like Apple are ramping up iPhone production in the country, and Tata Group is investing heavily in semiconductor plants. The government is offering incentives to support these initiatives, which will create demand for chipmaking equipment, benefitting firms like Tokyo Electron.

Globally, Tokyo Electron aims to hire 10,000 employees over the next five years as nations prioritize local semiconductor production. The company, which supplies equipment to industry giants like Taiwan Semiconductor Manufacturing Co., Samsung, and Intel, is forecasting record revenue and profit for the fiscal year ending March. This is driven by anticipated growth in chip demand, fueled by advancements in AI, autonomous vehicles, and energy efficiency.

Despite pressure from the U.S. to restrict exports of advanced chipmaking technology to China, Kawai emphasized that global demand for semiconductors remains robust. While sales to China made up about 50% of Tokyo Electron’s revenue in the June quarter, this is expected to decrease to 25-30% as the company’s overall sales rise. India’s market is seen as a new area of growth rather than a replacement for China.

Tokyo Electron has committed to training Tata Electronics’ workforce on chipmaking equipment and supporting R&D efforts. India’s government has approved over $15 billion in semiconductor investments, including Micron Technology’s $2.75 billion assembly plant. Additionally, Tower Semiconductor is exploring a partnership with Gautam Adani for a $10 billion chip fabrication plant in western India.