India is trying to emerge as a competitive alternative to China in the semiconductor sector amid the intensifying chip war between the US and China.
India and the US last week signed a memorandum of understanding on establishing a semiconductor supply chain, which experts see as an opportunity for both nations to reduce global dependency on China.
“The MoU seeks to establish a collaborative mechanism for the semiconductor supply chain resiliency and diversification in view of the US CHIPS and Science Act and India Semiconductor Mission (ISM),” said Charlie Dai, vice president and research director at research firm Forrester.
ISM is a government initiative aimed to promote the growth and development of the semiconductor industry in India and to drive India’s strategy for developing the semiconductor and display manufacturing ecosystem.
India aims to be a key semiconductor player
Although India does not have native semiconductor manufacturing firms, the country has been focusing on attracting global chip makers to set up facilities in the country. In December 2021, India approved a $10 billion incentive plan to attract investments for semiconductor manufacturing and display production and to become a key player in the global semiconductor supply chain.
The semiconductor industry relies on a complex global supply chain for raw materials such as silicon wafers, chemicals, and gases. Disruptions in the supply of materials due to the pandemic and geopolitical tensions have contributed to a semiconductor shortage, impacting products ranging from servers and PCs to automobile manufacturing.
As a result, businesses around the world are thinking about how to tackle the supply chain disruption, which is largely a result of overdependence on just a few countries for chips.
Taiwan, South Korea, Japan, the US, and China are currently the major players in chip manufacturing.
With the US increasingly worried about China’s growing geopolitical power, which rests in part on its manufacturing capabilities, US President Joe Biden’s administration has been issuing sweeping restrictions on exports of chip technology to China.
This has made India a potential sweet spot for chip technology development and possibly a key link in the global semiconductor supply chain.
The US-India MoU signals that the US considers India to be a future partner in building a resilient supply chain, said Gaurav Gupta, an analyst at research firm Gartner.
However, considering the “entire semiconductor space, which includes raw silicon wafers; chip design; wafer fabrication; assembly including test and packaging; raw materials including chemicals, and EDA [electronic design automation] — the only area where India has a decent presence today is in chip design or what is also considered to be part of the fabless ecosystem,” Gupta said.
Understanding the need for being competitive in a sector that is as significant as semiconductors, India is working…
2023-03-22 23:00:04
Article from www.computerworld.com