Davos 2024: India needs to develop profitable semiconductor firms that become world leaders, says Chip War author Chris Miller

Chandra R Srikanth and Chris Miller at Davos 2024

India needs to develop its own profitable semiconductor firms that become world leaders and can keep investing in chips for the long-term rather than just depend on government subsidies, Chip War author Chris Miller told Moneycontrol at the World Economic Forum in Davos.

“The key is to focus on developing profitable companies that can keep investing. Over time, governments play a role. They help catalyze the ecosystem in its early stages and they provide a context in which businesses can invest,” said Miller.

“But ultimately, you need successful tech firms that make money and become world leaders. India has a track record at doing that. It needs to make sure the chip industry develops those types of firms as well,” he added.

While India has launched a $10 billion chip subsidy scheme to attract semiconductor makers to the country, the noted author said that pursuing chip design holds more promise as a strategy. Miller is expected to meet Union Minister Ashwini Vaishnaw at Davos to talk about India’s semiconductor strategy.

“India should make sure it's spending just as much time focusing on building out its design ecosystem as it has its manufacturing and assembly ecosystems. Design is a really important sphere, especially for India which already has vast talent when it comes to chip design. That's a sphere where governments tend to under invest,” Miller said.

“You've got to make sure you're getting the return on investment that is commensurate with the scale of subsidies. There's no doubt that some level of subsidization is required if you want to attract the chip industry because every other major government is subsidizing too. If you don't put incentives forward, the industry will move elsewhere,” he added.

Chip War, authored by Miller and published in October 2022, is an epic account of the decades-long battle to control microchip technology — something that is indispensable to the modern world, from missiles to microwaves, smartphones to the stock market.

Days after ChatGPT maker OpenAI was found to have deleted a provision in its usage policy forbidding its technology from being used in war, the chip historian said AI is already being deployed for defense and intelligence uses by every major power.

"This isn't science fiction. This is happening today," he said.

However, Miller believes that it would be very difficult to get nations on board to agree to restrict AI use in the military.

"I think it's really questionable whether the leading powers can agree on rules of the road. There will be a lot of trust questions. Even if you were to write down rules, would you trust your adversaries to follow those? And as we found in the nuclear sphere half a century ago, it's very difficult to develop control regimes for these types of rapidly changing technologies," he said.