With three major American semiconductor companies announcing investment in India by signing memoranda of understanding (MoU) during Prime Minister Narendra Modi’s visit to the United States (US), Trade Minister Piyush Goyal said that “India has arrived on the semiconductor scenario”.
India and the US have signed a MoU to establish the semiconductor supply chain during the India-USA 5th commercial Dialogue 2023, which can help India realise its long-nurtured dream of becoming a hub of electronics goods.
The Semiconductor Sub-Committee is part of India-US efforts to increase private-sector cooperation in the area of semiconductors with a view to reducing their dependence on China and Taiwan. It is led by the Department of Commerce for the US side and the Ministry of Electronics and Information Technology (MeitY) and the Ministry of Commerce and Industry for the Indian side.
The chip-making industry is a highly-concentrated one, with the big players being Taiwan, the U.S. and China.
Micron Technology Inc, with support from the India Semiconductor mission, will invest more than $800 million towards a new $ 2.75-billion semiconductor assembly and test facility in India. Applied Materials will build a semiconductor centre for commercialization and innovation in India to further strengthen the semiconductor supply chain diversification. Lam Research will train 60,000 Indian engineers through its ‘Semiverse Solution’ to accelerate India’s semiconductor education and workforce development goals.
Goyal, whose Department is leading the subcommittee on semiconductor, on being asked when India can become a manufacturing hub of semiconductor, said: “R&D, testbeds, packaging, innovation, testing will gradually have end-to-end facility in India. We have Vedanta project, which is under implementation in Gujarat. My own engagement with these companies, Minister Ashwini Vaishnaw’s engagements as we met leaders from this industry, have been working, which is now culminating into a significant outcome.”
The Cybersecurity Administration of China said in May that Micron failed its security review and barred operators of key domestic Infrastructure from purchasing the biggest U.S. memory chipmaker’s products.
Goyal, on being asked how he looks at China banning Micron and India becoming the next favourite destination for the company, said: “India has arrived on the semiconductor scenario. India will be a market of $100 billion by 2030. We have potential, demand, credibility and friendship.”
Since 2020, there has been a major supply shortage of semiconductors across the globe with no end in sight. As almost all modern devices and electronic require semiconductors, many industries are struggling to meet strong consumer demand. Global companies are exploring India as a viable investments destination for semiconductors. The country is positioning itself as among the most attractive destinations in Asia for electronics and semiconductors.
The India semiconductor market was valued at USD 27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19 percent to reach USD 64 billion in 2023. But none of these chips are manufactured in India.
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