India Adds $13.3B to Chip Push as Phone Scheme Targets 5% of Sales

The new money sits alongside a ₹625 billion (about $6.5 billion) Mobile Phone Manufacturing Scheme that will run for five years, the same report says. Incentives range from 2.25% to 5% of eligible sales. Companies that source key components and sub-assemblies inside India get an extra 1.5%. The phone program runs through March 2031.

New Delhi expects mobile-phone production in that window to total about ₹39 trillion, roughly $405 billion, and says the scheme should create about 60,000 direct jobs. Those are government projections, not results.

The scale of the gap is the story. China accounted for 63% of global smartphone production in 2025, against India's 18%, according to Counterpoint Research. TechCrunch cites that figure to show how much supplier ecosystem India still has to build. India began assembling iPhones in 2017 and now makes about 25% of them through suppliers including Foxconn and Tata Group.

From assembly to components

India has been good at final assembly and dependent on imported parts. The new program is meant to change that. It shifts the country away from what IDC's Navkendar Singh called the "assemble more" playbook toward what he described to TechCrunch as "depth, R&D and local value capture." Singh said Apple stands to benefit directly. Stronger manufacturing and export credentials, he added, could push the company's supply-chain partners to source more components locally.

There is also a push on Indian brands. The scheme includes an additional 3% of eligible sales for product design and research aimed at developing domestic handset makers, Indian IT Minister Ashwini Vaishnaw said at a media briefing. India has had homegrown players including Micromax, Karbonn and Lava, but they lost ground as Xiaomi, Vivo and Oppo expanded in the country.

"The semiconductor space is now in the upcycle — and Malaysia will be a beneficiary of that," Amir Hamzah Azizan, Malaysia's second finance minister, told CNBC at the IMF spring meetings.

Malaysia's position is different. It holds 13% of the global market for chip packaging, assembly and testing services, according to the Malaysian Investment Development Authority in a Feb. 18 report cited by CNBC. The country is trying to move up the value chain rather than compete head-on at the leading edge. Amir Hamzah said he does not see China, Malaysia's largest trading partner, as a rival. "There is enough growth that will go around," he told CNBC.

Materials and the fab floor

Capacity plans run into physical constraints that predate any of these programs. High-purity quartz from Spruce Pine, North Carolina, is used to make the crucibles that hold molten silicon in the Czochralski process. Most of the world's supply comes from two companies mining there: Sibelco subsidiary Covia and The Quartz Corp. Writing on Construction Physics in November 2024, Brian Potter estimated Spruce Pine produces 180,000 to 200,000 tons of high-purity quartz a year. He notes, though, that the industry is secretive and the numbers are hard to confirm.

Potter's conclusion is narrower than the viral version. Cutting off Spruce Pine would not stop semiconductor production, he argues, but it would cut yields and raise costs, because alternatives are not yet developed, not as good, or not as cheap. Crucibles cost several thousand dollars each and last around 400 hours of operation. One paper he cites estimated they accounted for 30% of the manufacturing cost of monocrystalline silicon ingots.

Hurricane Helene hit North Carolina in late September 2024. It brought more than two feet of rain to Spruce Pine and cut roads and power, Tom's Hardware reported on 1 October 2024. Sibelco had confirmed a suspension of operations, the site said. The Quartz Corp told The Verge it was too early to determine whether its high-purity quartz facility was affected. Tom's Hardware also noted reader pushback on its own headline: the mines sit in the hills, not in the town, and the extent of damage was unknown.

Automation is the other lever, and it has a long history. IEEE Spectrum recounted Project SWIFT, the IBM line led by Bill Harding from 1970 that aimed to fabricate integrated circuits in under a day. It averaged five hours per fabrication layer, against 19 hours for the fastest modern fabs and an industry average of 36 hours, Spectrum reported. Today's chips use more layers on larger wafers, so the comparison is not exact. The turnaround gap is real.

For India, the harder test is whether suppliers, technology and higher-value production follow the assembly lines. Pankaj Mohindroo, chairman of the India Cellular and Electronics Association, whose members include Apple and Google, told TechCrunch the country should aim for 35% to 40% of global mobile-phone production. That is roughly double India's current share, and it depends on the component ecosystem the new incentives are meant to build.