India is accelerating efforts to become a global powerhouse in semiconductor production with three factories breaking ground this year, though its success hinges on whether it can dispel lingering infrastructure concerns.

Under Prime Minister Narendra Modi, India has worked to attract investment in the field through tax reform and subsidies. The government at the end of February approved the construction of three semiconductor facilities.

Two of them — a fabrication hub owned by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp., and an assembly plant owned by Japan’s Renesas Electronics, Thailand’s Stars Microelectronics and India’s CG Power — are located in Gujarat, Modi’s home state.

The third plant, belonging to Tata Semiconductor Assembly and Test, is located in Assam, a state that has been slow to attract manufacturers.

“These semiconductor manufacturing hubs will have lasting effect on the entire nation,” Natarajan Chandrasekaran, chairman of Tata Group holding company Tata Sons, said at a foundation-laying ceremony for the three plants this month.

“The day is not distant when [India] will emerge as a global powerhouse in this field,” Modi said at the ceremony.

With China facing protracted tensions with the U.S., India has emerged as an alternative manufacturing hub for global business.

In a Japan Bank for International Cooperation survey conducted last year, Japanese manufacturers saw India as the most promising country over the medium-term for the second year in a row, while China fell to third place. The percentage of respondents voicing concern over Indian infrastructure has been declining over the years.

Still, whether semiconductor production in India “can overcome challenges on electricity, water and talent remains unclear,” said Shotaro Kumagai at the Japan Research Institute.

Even areas with better infrastructure, like Gujarat, still experience temporary power outages, according to Kumagai. Low production yields “means production hubs could end up generating little profit,” he said.

Many companies remain cautious about investing in India. The manufacturing sector accounts for less than 20% of the country’s gross domestic product, below the 25% target set by Modi’s government.