AMD bets big on India's chip design sector with USD 400 million investment

AMD plans to create 3,000 engineering jobs in India through a new design centre, marking a USD 400 million investment in the country's chip industry.

Advanced Micro Devices (AMD), a US chip design business, said Friday that it will invest up to USD 400 million in India over the next five years and build the country's largest design centre. According to Mark Papermaster, the chipmaker's chief technology officer, the money would be used to build a design centre in Bengaluru's innovation cluster.

AMD's office presence in India will grow to ten locations with the opening of the new facility. It already employs around 6,500 people in the country. The new plant will create around 3,000 new engineering jobs by the end of 2028.

The AMD campus is expected to open by the end of 2023 and will include extensive lab space, cutting-edge collaboration tools, and seating configurations designed to foster teamwork, according to a statement from the company, which also stated that its investment is "supported by various policy initiatives of the Government of India focused on the semiconductor industry."

AMD is the world's top designer of semiconductor processors and Intel's main competitor. Unlike several of its primary competitors, it does not produce chips in-house, instead outsourcing them to contract manufacturers such as TSMC.

AMD CEO Mark Papermaster made the news during the annual semiconductor conference, which began Friday in Prime Minister Narendra Modi's home state of Gujarat. Foxconn (2317. TW) Chairman Young Liu and Micron (MU.O) CEO Sanjay Mehrotra will also speak at the headline event.

Despite being a latecomer, the Modi administration has been pursuing investments in India's fledgling chip sector in order to establish its credentials as a chipmaking centre.

"Our India teams will continue to play a pivotal role in delivering the high-performance and adaptive solutions that support AMD customers worldwide," Papermaster stated.

AMD processors are utilised in a wide range of applications, from personal PCs to data centres. The Santa Clara, California-based company is also developing an artificial intelligence processor to compete with industry leader Nvidia Corp (NVDA.O).

Unlike its main rival Intel, AMD outsources chip production to third-party manufacturers such as Taiwan's TSMC. TSMC and South Korea's Samsung are among the few chipmakers in the world to have mastered cutting-edge chipmaking, a technology that many nations are now fighting for in order to prevent supply chain shocks like those experienced during the epidemic.

In 2021, India announced a USD 10 billion incentive scheme for the chip business, but the plan has stalled since no company has received approval to build up a fabrication unit, the centrepiece of Modi's objectives.

Other investments in India include Applied Materials' (AMAT.O) USD 400 million multi-year plan to establish an engineering centre in June, and chipmaker Micron's USD 825 million investment in a semiconductor testing and packaging operation in Gujarat.