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  • Writer's pictureHarris Oldroyd

Chips on the Table: India's Bold Bid to Power the Future

The semiconductor industry stands as the backbone of modern technology, fuelling advancements from smartphones to satellites. As global demand surges, nations are strategizing to fortify their positions in this critical sector. Among them, India emerges as a formidable player, poised to redefine semiconductor manufacturing and supply chains. Taiwan is the current leader, accounting for 50% of the semiconductor market, and other top countries include South Korea, Japan, China, and the United States.

Semiconductors, the tiny chips powering electronic devices, have become indispensable. They're the heartbeat of digitalization, driving the functionality of everything from everyday appliances to sophisticated computing systems. We use devices containing these chips every single day, and they play a crucial role in our lives. Smartphones, computers, laptops, cameras, televisions, washing machines, refrigerators, LED bulbs, and cars, just to name a few.

Manufacturing semiconductors is a complex, resource-intensive process that demands advanced technological capabilities and substantial investment. It's a strategic industry with significant implications for national security, economic prosperity, and technological independence.

A pivotal moment unfolded on February 14, 2024, when the Semiconductor Industry Association (SIA) and the India Electronics and Semiconductor Association (IESA) unveiled a report crafted by the Information Technology and Innovation Foundation (ITIF). This comprehensive study, "Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains," commissioned through the U.S.-India Initiative on Critical and Emerging Technology (iCET), marks a critical step in bolstering India-U.S. cooperation in semiconductor technology. It underscores India's growing significance in the global supply chain and outlines strategic recommendations for enhancing its competitive edge, including policy reforms and fostering U.S.-India partnerships in semiconductor advancements. In particular, the report recommends exploring a pilot visa programme to ease the movement of skilled workers between the US and India, as well as partnerships with higher education institutions to enhance India’s workforce. Additionally, it recommends policy reforms aimed at reducing the cost of business by providing tax incentives to chip companies, streamlining customs procedures, and expediting goods clearance.

In a landmark move on February 29, 2024, India approved the establishment of three semiconductor plants, signifying a $15.2 billion investment. This decision, featuring collaborations with giants like Tata Group and CG Power, signifies India's ambitious vision to become an electronics powerhouse. With an eye on competing with leading chipmaking nations such as Taiwan and bolstering sectors ranging from defence to telecommunications, these plants represent a leap towards self-reliance and technological sovereignty. Construction on the plants is said to begin within the next 100 days.

India's stride towards semiconductor manufacturing excellence is more than an economic manoeuvre; it's a strategic positioning in the global tech landscape. With the right mix of policies, international cooperation, and industry support, India is not just aiming to join the ranks of global semiconductor producers but to carve out a niche that could redefine supply chains and technological advancements. The recent green light for semiconductor plants, backed by the insights of the ITIF report, paints a promising future for India in the semiconductor arena, with promising ripple effects for the global tech ecosystem and beyond.



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