Still competing with chip giants, India’s rise in the East raises a crucial question: Are global chip dynamics shifting? The contrast is striking—while the West faces stalled and delayed manufacturing, Asian facilities are rapidly turning ‘operational.’
Less than five years ago, the world scrambled for semiconductors amid the pandemic. Chips were the new oil, and the West rushed to counter China and East Asia’s dominance. But today, the landscape has shifted. Billions in subsidies. Political promises. Dreams of semiconductor independence. Yet, Europe’s chip-making ambitions are faltering—stalled by bureaucracy and economic realities. Factories remain unfinished, investments waver, and Asia continues to lead.
But in a surprising twist, it is not just Taiwan and South Korea driving the industry—India is emerging as a player. Once an outsider in the silicon supply chain, it is quietly drawing investments, reshaping the semiconductor map and the power structures that come with it.
Reports in recent months highlight widespread delays and halts in global semiconductor projects—primarily in Europe and, to some extent, the US. Industry giants like Wolfspeed and Intel have reported suspensions at various fabs, while the GlobalFoundries-STMicroelectronics project in Crolles, France, was recently put on hold for reasons still unclear.
In response, companies are revising investment strategies, optimising costs, and exploring new financing options to stay on course. The question lingers: Is this a momentary disruption, or the start of a deeper shift in the global semiconductor industry?
The projects in limbo
At the beginning of this year, Bloomberg reported that the 58:42 fab venture between GlobalFoundries and STMicroelectronics in France had hit a roadblock. Construction stalled over the past 18 months, leading to a pause. Announced in July 2022 and finalised in June 2023, the €7.5 billion project—backed by ‘European Chips Act’ funding—was set to build a 12-inch (30.48cm) semiconductor fab alongside their existing Crolles facility. Production was slated for 2026, with an annual output of 620,000 wafers.
Meanwhile, Wolfspeed has delayed its $3 billion semiconductor plant in Saarland, Germany. In a June 2024 report, Reuters called this a setback for the European Union’s efforts to strengthen local chip production and reduce dependence on Asia. Originally planned for electric vehicle (EV) chip production, the project has been pushed back by two years, with construction now expected to begin in mid-2025 as Wolfspeed seeks additional funding amid internal investment pressures and broader market challenges in Europe and the US.
Across the Atlantic, Wolfspeed announced further restructuring, closing its 150mm Durham fab in North Carolina and another facility in Texas, alongside a 20% workforce reduction. The company cited struggles in the EV market as the driving force behind these moves. In 2024, a Cox Automotive report showed US EV sales rose 7.3% to 1,301,411 units, making up 8.1% of total sales (up from 7.8% in 2023). In contrast, European BEV registrations fell 10.2% in December, with annual volumes down 5.9%—driven by sharp declines in Germany (-38.6%) and France (-20.7%), according to ACEA (European Automobile Manufacturers’ Association).
| Table 1 The status of major semiconductor manufacturing projects in Europe | ||||
| Company | Location | Investment Amount | Project Details | Expected Completion Date |
| European Semiconductor Manufacturing Company (ESMC) | Dresden, Germany | €10 billion | TSMC, Bosch, Infineon, and NXP joint venture for automotive and industrial chips. Expected by 2027. | 2027 |
| GlobalFoundries | Dresden, Germany | $8 billion | Expansion to double semiconductor production capacity. | Not specified |
| Intel Corporation | Magdeburg, Germany | €30 billion | Fab construction pending approval, expected completion in 4-5 years. | 4-5 years after approval |
| STMicroelectronics | Catania, Italy | €292.5 million | Silicon carbide wafer plant supported by EU Recovery Facility. Target completion in 2026. | 2026 |
| Photonic Chip Plants | Netherlands | €133 million | EU investing in photonic semiconductor pilot facilities. Development to start in 2025. | 2025 |
| Wolfspeed and ZF | Ensdorf, Germany | €3 billion (postponed) | Electric vehicle microchip factory. Project indefinitely postponed due to low demand. | Indefinitely postponed |
| Intel Ireland Fab 34 | Leixlip, Ireland | $7 billion | Expansion of existing Intel campus for 7nm process technology. Expected to be operational in 2023. | 2023 |
| Nexperia | Manchester, UK | Undisclosed | Expansion of wafer fab to increase power semiconductor production capacity. | Not specified |
| Tower Semiconductor & STMicroelectronics | Agrate Brianza, Italy | €3 billion | Joint venture for a 300mm fab focused on analogue and mixed-signal technologies. Expected by 2026. | 2026 |
| X-FAB | Dresden, Germany | €200 million | Upgrading 200mm wafer production for automotive and industrial applications. | Not specified |
| Bosch Reutlingen Expansion | Reutlingen, Germany | €400 million | Expansion to increase automotive semiconductor production. Expected completion by 2025. | 2025 |
| Siltronic AG | Freiberg, Germany | €2 billion | New 300mm wafer plant for semiconductor manufacturers. Operations planned by 2025. | 2025 |
| NXP Semiconductors | Eindhoven, Netherlands | €500 million | Facility upgrade to enhance automotive semiconductor production. Expected by 2024. | 2024 |
Intel has also been grappling with delays. Its Magdeburg, Germany, fabs—Fab 29.1 and Fab 29.2—have been postponed due to EU subsidy approval delays and soil removal requirements. Originally set to begin in summer 2024, construction will now start in May 2025. The two fabs, intended to house Intel’s advanced 14A (1.4nm) and 10A (1nm) manufacturing technologies, were initially expected to start production by late 2027. That timeline has now slipped to between 2029 and 2030.
Intel’s Ohio-based chip projects face similar setbacks. The $20 billion investment in two fabs in Licking County, announced in January 2022, was expected to be operational by 2025. However, weak market demand and delayed government subsidies have pushed construction to 2026-2027, with production now slated for 2027-2028.
On the other side of the coin
In a separate development, three semiconductor projects made headlines recently. German-based Infineon has officially started constructing a new backend semiconductor factory in Thailand. Indian company Indichip, alongside Japan’s YMTL, has made a joint investment of $1.6 billion to establish India’s first silicon carbide (SiC) wafer manufacturing facility. Last but not least, Fuji Electric has begun mass production of 6-inch (15.24cm) SiC power semiconductors at its facility in Japan.
On January 14, 2025, Infineon began constructing its new semiconductor backend production facility in Samut Prakan, south of Bangkok, Thailand. The first phase of the facility is expected to start operations by early next year, with plans for flexible capacity expansions based on market demand.
Indichip Semiconductors Ltd, an emerging power semiconductor startup in Amaravati, India, has partnered with Japan’s Yitoa Micro Technology (YMTL) to invest `140 billion (around $1.6 billion) in establishing a silicon carbide wafer manufacturing plant in Andhra Pradesh.
The initial production capacity is expected to reach 10,000 wafers per month, with plans to scale up to 50,000 wafers per month within two to three years. Initially focusing on 6-inch (15.24cm) SiC wafers, the company plans to transition to 8-inch (20.32cm) wafers.
Furthermore, Fuji Electric has started mass production at its facility in Aomori Prefecture, Japan, as of December 2024. The company had initially planned to begin production in the summer of 2024, but delays due to lower global demand for EVs pushed back the schedule.
Besides, China’s influence in the semiconductor industry is undeniable, with major players deepening their regional investments. At GlobalFoundries’ 2024 summit in Shanghai, the company clarified that its future strategy hinges on local partnerships rather than setting up its own facilities.
Likewise, STMicroelectronics has strengthened its presence through key collaborations with Sanan Optoelectronics and Hua Hong Semiconductor. European firms like Infineon and NXP are also ramping up their ‘Made in China’ efforts, recognising that despite geopolitical tensions, China’s demand remains crucial for growth.
| Table 2 The status of major semiconductor manufacturing projects in the US | ||||
| Company | Location | Investment Amount | Project Details | Expected Completion Date |
| Intel Corporation | Chandler, Arizona | Not specified | Construction of two new fabs, Fab 52 and Fab 62. | 2024 |
| Licking County, Ohio | $20 billion | Construction of two fabs. Recent reports indicate that the production facilities are now slated for completion in 2030 and 2031, extending beyond the initially promised 2028 deadline. | 2030 and 2031 | |
| Taiwan Semiconductor Manufacturing Company | Phoenix, Arizona | Additional $100 billion | The expansion includes the construction of three additional fabs, two advanced packaging plants, and a research and development centre. The first Arizona factory has begun mass production of 4-nanometer chips. | Not specified |
| Samsung Electronics | Taylor and Austin, Texas | Approximately $40 billion | Construction of two new semiconductor fabrication plants and a research and development facility in Taylor, as well as an expansion of the existing facility in Austin. | Not specified |
| Micron Technology | Clay, New York, and Boise, Idaho | Not specified | Construction of new semiconductor manufacturing facilities, including a “mega-fab” in Clay, New York, expected to create approximately 20,000 jobs. | Not specified |
| GlobalFoundries | Malta, New York, and Essex Junction, Vermont | $1.5 billion | Building a new fab in Malta and upgrading the Essex Junction plant to enhance the production of critical semiconductors for various sectors. | Not specified |
| Integra Technologies | Wichita, Kansas | $1.8 billion | Proposal to build a one-million-square-foot OSAT facility and headquarters, expected to create at least 2000 new jobs. | Not specified |
| Amkor Technology | Peoria, Arizona | $2 billion | Plans to build an advanced packaging and testing facility, motivated by collaborations with companies like Apple and TSMC. | Not specified |
Why the West is at the heart of these delays
The semiconductor story is not just about technology—it is about power, politics, and shifting global dynamics. Production spans several specialised stages—design, fabrication, assembly, testing, and packaging—each distributed across different regions.
US and European firms dominate semiconductor design, with Nvidia leading in AI chips and Arm’s technology embedded in most consumer electronics. Taiwan’s TSMC manufactures 60% of the world’s chips and 90% of advanced semiconductors, while South Korea remains a key supplier of memory components. Assembly, testing, and packaging are concentrated in China, Japan, and South Korea, reinforcing East Asia’s dominance.
This regional concentration makes the supply chain highly vulnerable. A disruption in one region can ripple across industries worldwide, intensifying the urgency for diversification as geopolitical risks escalate.
With Joe Biden’s term having ended on January 20, 2025, uncertainty looms over the US CHIPS Act of 2022 and the return of Trump’s tariffs. The Western world is bracing for a seismic shift in semiconductor policy.
Meanwhile, political and economic turbulence in Germany and France—Europe’s largest economies—is undermining the EU’s semiconductor ambitions. The Russia-Ukraine conflict has driven energy costs to record highs, disrupting European industry. Even if a ceasefire emerges under a Trump administration, the economic fallout will persist.
Germany’s reliance on Russian natural gas has slowed its economy, while France grapples with rising deficits, tax hikes, and spending cuts. The surge of far-right conservatism in both nations adds further uncertainty, stalling industrial projects. As a result, Germany’s semiconductor ambitions are faltering, and France’s chip plans remain in limbo.
According to DIGITIMES Asia, the current Trump presidency could further worsen these challenges, adding geopolitical and economic uncertainty and making it harder for Europe to regain its semiconductor competitiveness.
A Deloitte report highlights that Europe consumes twice as many chips as it manufactures, making it highly dependent on Asian suppliers. The region’s reliance on East Asian chip imports has already caused disruptions, especially in industries like automotive, aerospace, and consumer electronics. The EU and the US efforts to localise chip production face two major challenges:
1. High costs. Building fabs in Europe or the US is significantly more expensive than in Asia.
2. Longer supply chains. Even if European and American fabs increase production, the supply chain remains lengthy and expensive.
And this is precisely where India comes in.
| Table 3 Major Semiconductor Manufacturing Projects in East and Southeast Asia | ||||
| Company | Location | Investment Amount | Project Details | Expected Completion Date |
| TSMC (Taiwan Semiconductor Manufacturing Company) | Kumamoto, Japan | US$8.6 billion | Japan Advanced Semiconductor Manufacturing, Inc. (JASM), a joint venture between TSMC (70%), Sony Semiconductor Solutions (20%), and Denso (10%), established Fab 23, producing 12-, 22-, and 28-nanometer processes. | Operational since December 2024 |
| Kumamoto, Japan | US$13.9 billion | A second factory adjacent to Fab 23, currently under construction, will produce 6-nanometer and 12-nanometer processes. | Not specified | |
| Nanjing, Jiangsu, China | Not specified | Fab 16, a 300mm wafer fabrication facility operated by TSMC Nanjing Company Limited. | Operational | |
| Powerchip Semiconductor Manufacturing Corporation (PSMC) | Miyagi Prefecture, Japan | Not specified | Joint venture with SBI Holdings to build a 12-inch (30.48cm) wafer fabrication facility at the Second Northern Sendai Central Industrial Park. | Not specified |
| Onsemi | Bucheon, South Korea | Not specified | Manufacturing facility focusing on 150mm and 200mm wafer production. | Operational |
| Leshan, China | Not specified | Manufacturing facility. | Operational | |
| Shenzhen, China | Not specified | Manufacturing facility. | Operational | |
| Suzhou, China | Not specified | Manufacturing facility. | Operational | |
| Thuan An, Binh Duong, Vietnam | Not specified | Manufacturing facility. | Operational | |
| Bien Hoa, Dong Nai, Vietnam | Not specified | Manufacturing facility. | Operational | |
| Nexchip | Hefei, China | Not specified | Joint venture between PSMC and Hefei City Construction and Investment Holding Group, established in 2015. | Operational |
| STMicroelectronics and Sanan Optoelectronics | Chongqing, China | US$3.2 billion | Joint venture to establish an 8-inch (20.32cm) silicon carbide (SiC) device manufacturing facility. The project commenced production in February 2025, marking a significant advancement in SiC wafer manufacturing for automotive and industrial applications. | Operational since February 2025 |
| TSMC | Hsinchu, Taiwan | Not specified | Fab 12A and Fab 12B, 300mm wafer fabrication facilities with multiple operational phases and ongoing expansions. | Operational and expanding |
| Shanhua District, Tainan, Taiwan | Not specified | Fab 14 and Fab 18, 300mm wafer fabrication facilities with multiple operational phases and ongoing expansions. | Operational and expanding | |
| Taichung, Taiwan | Not specified | Fab 15, a 300mm wafer fabrication facility with multiple operational phases and planned expansions. | Operational and expanding | |
| Kaohsiung, Taiwan | Not specified | Fab 22, a 300mm wafer fabrication facility with planned multiple phases; Phase 1 is under construction. | Phase 1 under construction | |
The advent of India and why India
According to Reuters, India’s semiconductor market is projected to reach $63 billion by 2026, signalling its growing influence in the global chip economy.
Global supply chain disruptions and escalating geopolitical tensions have prompted semiconductor companies to reconsider their manufacturing and investment strategies. Despite the European Union’s €43 billion Chips Act, both the US and EU still lack substantial manufacturing capacity, making them dependent on external sources.
Meanwhile, East Asia continues to dominate semiconductor production, with Taiwan, South Korea, Japan, and China accounting for over 70% of global chip manufacturing.
But this concentration comes with risks. Taiwan’s geopolitical vulnerability, tensions between the US and China, and potential disruptions in South Korea and Japan have fueled concerns about supply chain security. Countries are now actively looking for alternative and ‘friendly’ manufacturing destinations, and India might be an attractive option.
The country offers cost-effective labour, a large talent pool of English-speaking engineers, and favourable government policies. As Sarah E. Kreps, Professor at Cornell University, in a Wired report, points out:
“India has always had the potential, but until now, other semiconductor hubs have met the demand. This is India’s moment to capitalise on its strengths.”
Government initiatives and the talent pool
The Indian government is well aware of this “strength.” It has responded to these opportunities with aggressive policy measures, like the India Semiconductor Mission (ISM). Union Minister Ashwini Vaishnaw even announced that the first ‘Made-in-India’ chips would be produced by mid-2025.
India’s semiconductor strategy is manufacturing chips and creating a holistic ecosystem that includes design, testing, packaging, and research. The country already has a strong foothold in semiconductor design, with companies like Intel, AMD, and Qualcomm operating large R&D centres in Bengaluru and Hyderabad. The next step is to convert design expertise into large-scale manufacturing.
The India Brand Equity Foundation (IBEF) highlights several reasons why India is emerging as a key semiconductor hub. India’s strengths include a cost-effective workforce and a vast pool of skilled engineers, making it an attractive semiconductor hub. Strategic policies, such as the ₹760 billion Production Linked Incentive (PLI) scheme, encourage chip production, while the Design Linked Incentive (DLI) scheme supports domestic design startups. Additional measures include special economic zones (SEZs), semiconductor parks, and duty exemptions.
| Table 4 The status of major semiconductor manufacturing projects in India | |||||
| What | Under | Where | Who | Start | How Much (INR) |
| Fab | India Semiconductor Mission | Dholera, Gujarat | Tata Electronics, PSMC | 29 February 2024 | 910B |
| OSAT unit | India Semiconductor Mission | Morigaon, Assam | Tata Semiconductor Assembly and Test | 29 February 2024 | 270B |
| OSAT unit | India Semiconductor Mission | Sanand, Gujarat | CG Power, Renesas Electronics (Japan) Stars Microelectronics (Thailand) | 29 February 2024 | 76B |
| ATMP unit | India Semiconductor Mission | Sanand, Gujarat | Micron Technology | June 2023 | 225.16B |
| ATMP unit | India Semiconductor Mission | Sanand, Gujarat | Kaynes Semicon | 2 September 2024 | 33B |
| Fab | MH gov, ISM (pending) | Taloja, Panvel, Maharashtra | Tower Semiconductor (Israel), Adani Group | 5 September 2024 | 839.47B |
| OSAT facility | MH gov, Sachin Tendulkar | Navi Mumbai, Maharashtra | RRP Electronics, HMT Microelectronic AG | September 2024 | 365.73B |
| OSAT facility | GJ gov, ISM (pending) | Surat, Gujarat | Suchi Semicon | Opened in Dec 2024 | $100M |
Competing with East Asia: Can India catch up?
Despite its advantages, India faces stiff competition from well-established semiconductor giants like Taiwan and South Korea. TSMC, Samsung, and Intel continue to expand their production in Asia and the US, and China is investing over $150 billion in semiconductor development.
However, the global semiconductor landscape is not just about advanced chip manufacturing. Many industries—such as automotive, industrial, and telecom—still rely on mature node chips, an area where India can play a significant role. Moreover, India’s partnership with Powerchip Semiconductor Manufacturing Corporation (PSMC) in Gujarat and Vedanta-Foxconn’s $19.5 billion project indicate that the country is serious about establishing long-term semiconductor manufacturing.
What can be India’s semiconductor future?
As Western nations look for reliable and geopolitically stable partners, India is positioning itself as a manufacturing hub that complements—not replaces—existing chip powerhouses. While it may take years for India to match Taiwan’s high-end foundry capabilities, the country is well on its way to becoming a trusted semiconductor manufacturing and design partner, as global investments keep pouring in.
Shubha Mitra is a Journalist at EFY, keenly interested in policies and developments shaping the electronics business.
