Dutch Chipmaker NXP to invest a ‘significant’ part of its $1 bn R&D fund in Karnataka

NXP Semiconductors, a Dutch chip designer and manufacturer, has announced plans to allocate a substantial portion of its Rs 8,400 crore ($1 billion) global research and development (R&D) investment to Karnataka over the next five years.  

This announcement was initially made in September by the company's CEO, Kurt Sievers, who stated that NXP would be investing over $1 billion in India, effectively doubling its R&D initiatives. "NXP is dedicated to enhancing its R&D efforts in the country over the next few years, which will exceed a billion dollars," Sievers said at the Semicon 2024 event in New Delhi that month.

He also noted that the company is engaging with the automotive sector and other industries within India, where it operates four semiconductor design centres employing approximately 3,000 individuals.

Currently, M B Patil, the Minister for Large and Medium Industries, is leading a promotional campaign in the Netherlands to attract international investment in anticipation of the Invest Karnataka 2025 summit. He highlighted that Karnataka possesses an unparalleled ecosystem conducive to innovation and industry.

As per the minister's office, the state delegation engaged with Maurice Geraets, Executive Director at NXP, to discuss the company's strategic expansion plans. Geraets indicated that a considerable share of NXP's $1 billion R&D investment would be allocated to Karnataka over the next five years. Patil assured comprehensive government support for NXP's initiatives and formally invited the company's leadership to participate in Invest Karnataka 2025. 

The Dutch semiconductor company already has close to 4,000 employees spread across four locations (Bengaluru, Noida, Pune, and Hyderabad) in India. NXP Semiconductors’ primary focus areas are automotive, industrial, IoT, and communication infrastructure. The India team is involved in both hardware and software for these sectors, specifically creating advanced chips and supporting software. 

In an interview with TechCircle in September, NXP Semiconductors’ country manager for India Hitesh Garg said, “Over the past 3–5 years, we have doubled our R&D investment and expect to double it again within the next 4–5 years. This growth focuses on advancing our competencies in hardware and software system solutions, with a particular emphasis on industrial IoT, home automation, and healthcare sectors.

Although chip manufacturing in India is still in its early stages, it plays a vital role in the nation's economic strategy, with a $10 billion incentive package designed to enhance its competitiveness against global chip manufacturing leaders such as Taiwan. India anticipates that its semiconductor market will reach a valuation of $63 billion by 2026.

Other major semicon companies like Nvidia and AMD have established significant research and design centres in India, highlighting the country's growing significance in the global ecosystem, which aims to decrease dependence on traditional hubs like China and Taiwan.
India is increasingly contributing approximately 20 per cent of the global talent in chip design, and we are in the process of developing a semiconductor workforce comprising 85,000 technicians, engineers, and research and development specialists," stated Indian Prime Minister Narendra Modi during the event.

In February, India approved the establishment of three semiconductor manufacturing plants with an investment of Rs 1.26 trillion ($15 billion) from companies such as Tata Group and CG Power, as part of its ambition to emerge as a leader in the electronics sector.

Micron's CEO, Sanjay Mehrotra, indicated last year that the company's planned $2.7 billion testing and packaging facility in Gujarat is expected to generate approximately 5,000 jobs in the region. Chipmaker Applied Materials further announced its plans to invest $400 million over 3-4 years to establish a new engineering centre in India.

In October, NXP reported third-quarter revenues of $3.25 billion, aligning with analyst expectations following a challenging performance in the July quarter. Additionally, the company forecasted fourth-quarter revenue and profit figures that fell short of analysts' predictions, attributing this to ongoing weak demand for semiconductors in the automotive sector and other businesses reducing expenditures due to budgetary limitations in a sluggish economic environment.