Minister Vaishnaw expects more companies to start manufacturing memory chips in India

New companies are likely to invest in India in memory chip manufacturing, while existing investors will increase production to address the demand-supply gap in the segment, Union Minister Ashwini Vaishnaw said.

Strong demand for memory (storage) cards and advanced chips has tightened global supply and fueled higher prices in recent quarters, and manufacturers have been ramping up investment and production capacity to meet market demands around the world. Higher prices for memory chips, in turn, led to increased production costs for a number of electronic products, including smartphones and laptops.

“Certainly there is a lot more investment coming into the memory units because for the first time in the way the semiconductor industry has grown at such a rapid pace, for the first time we’re seeing a huge shortage of certain components that are required in AI data centers, high-bandwidth memory chips,” Mr Vaishnaw said.

Data center investment in India is expected to cross $200 billion soon, which may require billions of gigabytes of storage capacity.

The Minister said that there is a global phenomenon of supply and demand imbalance which is now being addressed by setting up many more units.

“For example, there are high-bandwidth memory chips that are made by Micron. They are the first plant to start commercial production on February 28 this year. This is the second plant to start commercial production on March 31. These are steps that have started to yield results. There is a serious supply-demand mismatch for memory,” he said.

Asked if there will be new investment in the memory chip segment or if only existing players are planning to ramp up production, Mr. Vaishnaw said, “It looks like both could happen.” He said India Semicon Mission (ISM) 1.0 could get about 48 startups to work on technology products.

“In ISM 2.0, that will be the top priority, the design will be the top priority. The second biggest priority will be the machines that are used in the manufacturing of semiconductors. We will be looking seriously at getting equipment manufacturers to come to India to design equipment and also to manufacture equipment,” Mr. Vaishnaw said.

The minister said that after decades of efforts, India has succeeded in attracting chipmakers to the country under Prime Minister Narendra Modi’s regime as the India Semicon Mission 1.0 program lays the foundation for a robust domestic semiconductor industry.

He said that work on ISM 2.0 is at an advanced stage, according to which the chip design will be the top priority.

The minister said the government will also look into domestic production of complex chemicals and gases that are used to make chips.

“Of course we will add many more fabs (chip manufacturing plants) and ATMP (chip packaging) units. We will continue the progress we made in developing talent in the first version of the semiconductor mission,” Vaishnaw said.

Talking about the growing investment in the data center space in India, the minister said that the large pool of talent availability in India is one of the fundamental reasons that attracts companies from all over the world to set up their units in India.

“Secondly, our grid is practically a new grid. More than 2,000 thousand kilometers of transmission lines have been built in the last decade. There is incredible modernization of transmission. It is a very robust grid. Thirdly, there is a large availability of renewable energy in our country. Practically 50% of our power generation capacity comes from renewable sources,” said Mr. Vaishnaw, adding that these three large scales attract India.

“Many countries, including some rich countries, have networks that are 30 to 50 years old, which causes imbalances when data center energy consumption grows significantly. This is very different from the robustness of our network that has occurred in the last few decades,” the minister said.

When asked about environmental concerns around data centers, Mr. Vaishnaw said, “Of course we follow very strict standards. A lot of innovation is also coming. Innovation in terms of energy consumption, water and using certain water cooling methods that reduce water consumption by about 70%. Such innovations are happening.” There are concerns about increasing energy and water consumption by data centers around the world.

According to a study by Mordon Intelligence, data center water consumption in India is estimated at 150.30 billion liters in 2025 and is expected to reach 358.66 billion liters by 2030.

Published – 14 June 2026 10:00 PM IST