(This is the second article in a two-part series on the US-China semiconductor battle, and where India stands in it. Here is the first part)

When Chandrayaan 3 landed on the moon on August 23 last year, there was one place in Mohali that was particularly jubilant: the government-run Semiconductor Laboratory (SCL). It was a personal win for SCL's engineers, the unsung heroes who for months worked on producing a wide variety of semiconductors critical for controlling and commanding the mission. The spacecraft used chips to enable communication with Earth and navigate its way to the landing destination, using sensors and cameras to transmit data and messages.

Mohali's SCL is India's only well-known chip-making foundry. It began production in 1984, three years before the world's biggest semiconductor manufacturing company, the Taiwan Semiconductor Manufacturing Company (TSMC), was founded.

Today, however, while TSMC produces 90% of the world's most sophisticated and advanced semiconductors or microchips, churning out the most valued 5-nanometer (nm) chips in size, SCL can make only legacy chips of 100 nm and above, which are obviously many generations old. TSMC's annual turnover exceeded $70 billion last year, far more than the SCL's meagre $5 million. And while TSMC's clients are some of the world's leading tech firms, such as Apple, AMD and Nvidia, among SCL's top clients is just ISRO (Indian Space Research Organisation). TSMC's factories are state-of-the-art; SCL is in dire need of modernisation and upgradation.

SCL could have been TSMC's largest rival if it were not for one very unfortunate incident, which pushed India back to the semiconductor dark ages. On February 27, 1989, a mysterious fire broke out in the plant, destroying most of the facilities. To date, no one knows if it was an act of sabotage or an accident. The factory later rose from the ashes, but by then, it was left far behind in the race.

Dan Hutcheson of Canada's TechInsights company, one of the industry's global voices, surprised me when he said he had been monitoring the Indian chip industry since the 1970s. "I have seen India strive for this industry my entire career. There have been only failures. It is important for India to be successful now." Dan is not wrong, as India's semiconductor history is made up of a series of broken dreams and unfulfilled promises. Several multinational companies tried their luck in setting up chip production projects, but they did not materialise for various reasons.

It took India over three decades after the 1989 tragedy to see a........

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