September 13, 2024 /SemiMedia/ — NXP Semiconductors announced plans to invest over $1 billion in India to enhance its research and development capabilities, reinforcing its commitment to the country as it ramps up its semiconductor industry.

NXP CEO Kurt Sievers, speaking at the Semicon India conference near New Delhi, said the company aims to double its R&D investment in India over the next few years, with spending to exceed $1 billion. NXP currently operates four semiconductor design centers in India, employing around 3,000 people, and is in talks with the country's automotive and other industries.

While semiconductor manufacturing in India is still in its infancy, it remains a key element of the nation's economic strategy. The Indian government has rolled out a $10 billion incentive program to strengthen its position against global chip manufacturing hubs like Taiwan. The country's semiconductor market is projected to reach $63 billion by 2026.

Major chipmakers such as Nvidia and AMD have already established extensive research and design centers in India, underscoring the country's growing significance in the global semiconductor ecosystem.

In February, India approved the construction of three semiconductor plants worth ₹1.26 trillion ($15 billion) by companies including Tata Group and CG Power, aiming to bolster the nation's ambition to become an electronics manufacturing powerhouse. In addition, Applied Materials, a leading chip equipment supplier, announced plans last June to invest $400 million over four years to set up a new engineering center in India.

Despite these moves, NXP reported its steepest quarterly revenue decline in four years in July and forecasted third-quarter revenue below expectations, raising concerns about demand for automotive chips.