According to Union minister Ashwini Vaishnaw, new firms are expected to invest in India for memory chip production, while current investors will increase output to meet the demand-supply discrepancy in the sector.

Robust demand for memory (data storage) cards and advanced chips has constrained global supplies and bolstered higher prices in recent quarters, prompting manufacturers to enhance investments and production capacities to satisfy worldwide market needs.

The increase in memory chip prices has consequently resulted in higher production costs for various electronic devices, such as smartphones and laptops.

"Certainly, significantly increased investment is entering the memory production facilities, and this is due to the unprecedented growth of the semiconductor sector; we are witnessing a substantial shortage of specific components necessary for AI data centres, namely the high bandwidth memory chips," Vaishnaw states.

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Investments in data centres in India are anticipated to exceed $200 billion shortly, potentially requiring billions of gigabytes in storage capacity.

The minister stated that there's a worldwide issue of supply-demand disparity, which is currently being addressed by establishing numerous additional units.

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For instance, Micron produces the high bandwidth memory chips. They are the initial plant to begin commercial production on February 28 of this year. This is the second facility that commenced commercial production on March 31st. These are the steps that have begun to produce results. He remarked that there is a significant imbalance between supply and demand in terms of memory.

When inquired about new investments in the memory chip sector versus plans by current players to increase production, Vaishnaw replied, "It seems that both could occur."

He mentioned that the India Semicon Mission 1.0 might involve approximately 48 startups in developing tech products.

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"In ISM 2.0, design will be the highest priority. The second largest priority will be equipment, which is utilized in semiconductor production. We will be seriously considering inviting equipment manufacturers to India for both the design and production of the equipment," Vaishnaw says.