Image Credit: pmindia.gov.in
India’s Chip Marathon Gets a Head Start with Japan’s Legacy Tech
Japan has decided to relocate parts of its legacy semiconductor and display technology production to India, marking a significant shift in the global electronics landscape. These legacy chips and LCD lines, once central to Japan’s industrial base, will now find a new home in Indian manufacturing clusters. The move, developed under a framework by JETRO and the Confederation of Indian Industry, is designed to make Japan more competitive against low-cost Chinese rivals while giving India a much-needed head start in its semiconductor ambitions. Factories for compressors, LCDs, batteries, and mature chips are already in planning stages, with Tamil Nadu and Gujarat emerging as key hubs.
Think of it this way: India is trying to run a marathon in semiconductors. The Japanese move hands India good running shoes, a steady track, and a coach — while the big stadium (advanced fabs) is still being built. This partnership ensures India can actually start the race rather than wait endlessly at the starting line.
The focus on Japan’s so-called “legacy chips” is not a downgrade. Far from it. These chips power cars, refrigerators, air conditioners, medical devices, and even the backbone of power and telecom systems. When COVID shortages hit, it wasn’t the flashy high-end processors that caused chaos; it was the missing low-cost, everyday chips. Entire auto factories had to halt production because a handful of legacy semiconductors were unavailable. That is how vital they remain.
For Japan, shifting legacy production to India is about competitiveness. Chinese companies are flooding global markets with cheap legacy chips, and Japan cannot keep up on cost. Relocating to India gives Japanese firms a chance to remain viable. For India, the payoff is enormous. Instead of waiting five to seven years for its advanced fab ambitions to materialize, it gets factories, jobs, and hands-on experience in the here and now.
The immediate gains are clear. India spends billions importing chips and electronic components every year. Having Japanese firms build compressor plants, LCD lines, and battery units inside India directly substitutes imports. Automakers, appliance makers, and electronics companies will finally have reliable local supply chains. On the ground, this means jobs for technicians, engineers, quality control staff, and suppliers ranging from chemical makers to logistics providers. Tamil Nadu, Gujarat, and other states are already competing to become hubs.
Strategically, this move positions India as more than a consumer market. The United States and Europe are themselves investing billions into legacy chip plants because they’ve realized supply security matters as much as cutting-edge innovation. India, by attracting Japan’s legacy lines, joins that club of trusted manufacturing bases. It is no longer only dependent on China or Taiwan for the everyday semiconductors that keep industries running.
Another overlooked advantage is skill building. Chip manufacturing is about precision and discipline as much as machinery. Cleanroom operations, yield management, testing, and packaging are skills that can only be mastered by doing. The Japanese plants will serve as training grounds for Indian workers. Over time, the supporting ecosystem of chemicals, gases, and specialized suppliers will grow around them, creating an industrial cluster with depth and resilience.
This sets the stage for India’s advanced fabs. The Tata-PSMC plant in Gujarat and other approved projects will need robust supply chains and a trained workforce to succeed. Legacy plants provide exactly that foundation. It is like pacing yourself in the marathon — learning technique, building stamina — before attempting to sprint the last miles. India isn’t cutting corners; it is running smart.
Of course, challenges remain. India must ensure uninterrupted power and water for such precision-driven industries. It cannot afford to become just an assembly hub — genuine technology transfer and workforce upskilling are essential. Stronger intellectual property protection laws will also reassure Japanese investors that their technology is safe on Indian soil.
But the big picture is hard to miss. This Japanese move is not charity, nor is it India settling for less. It is a pragmatic and strategic leap forward. By securing the building blocks of the electronics industry, India ensures its chip dream rests on solid ground. The marathon has begun — and India, with Japan’s help, is finally running with purpose.
