NXP, a Semicon Enterprise, will Invest INR 8,400 crore in Karnataka's R&D

Nitin Konde, Varun Bhardwaj

Dec 6, 2024 — 3 min read

NXP to Invest INR 8,400 Crore in Karnataka R&D Expansion

NXP, a Dutch design and semiconductor manufacturing business, plans to increase its research and development (R&D) expenditures in Bengaluru. Over the following five years, the corporation intends to invest a sizeable amount of INR 8,400 crores, or almost $1 billion, in the state.

The news was made while Karnataka's minister of large and medium-sized industries, MB Patil, was on a roadshow in the Netherlands to solicit investments for the state in advance of Invest Karnataka 2025, the state's premier event.

Karnataka a Preferred Destination for International R&D Centres

In a discussion with the company's executive director, Maurice Geraets, Patil highlighted Karnataka's critical role in developing worldwide R&D capabilities. "Maurice Geraets, executive director of NXP, the third-largest semiconductor manufacturing and design business in Europe, and I had a productive meeting. Maurice revealed that over the next five years, our state will receive a sizable amount of NXP's $1 billion R&D investment," Patil wrote on X.

There were also interactions with other international players during the roadshow. The Bengaluru Innovation Campus, which recently received an investment of INR 445 crore (€50 million), was the focus of the minister's discussion with senior executives of Phillips.

Inviting Phillips to Establish a Manufacturing Unit in Karnataka

Philips should set up a manufacturing plant in Karnataka, Patil urged. While the state encouraged Signify, formerly Philips Lighting, to invest in Karnataka under the China plus one plan, the company showcased its projects in the state.

According to a statement from the department, Heineken, a multinational beer and cider corporation, talked about policy changes meant to increase its manufacturing investments in Karnataka. Minister Patil emphasised that the purpose of the roadshow was to establish Karnataka as a top location for foreign investors by showcasing the state's worldwide attractiveness in industries like advanced manufacturing, renewable energy, and semiconductors.

China-Plus-One Strategy

A strategy known as "China-Plus-One," or simply "Plus One," involves corporations diversifying their operations to other countries rather than solely investing in China.Western businesses have made significant investments in China over the past three decades, drawn by the country's low labour and manufacturing costs as well as the enormous and expanding local consumer market.

A blueprint for creating long-term, robust, collective supply networks was released in July 2022 by a consortium of 18 economies, including the US, India, and the EU. Steps to address supply chain vulnerabilities and dependencies were also included in the roadmap. One could consider this to be a component of the broader China-plus-one plan.

As early as 2008, U.S. and Japanese officials and businesses were considering diversifying away from China. But China-plus-one only became popular as a different approach for MNCs at the close of the past decade, when trade tensions between the US and China were at their highest. The main causes include the recent decline in China's cost advantage and the escalating geopolitical mistrust between China and the West.