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India Seeks to Be Global Chip Powerhouse

Ashwini Vaishnaw, India’s minister of electronics and information technology, railways, and communications, during a conversation with media representatives, said that this country is striving to be on the list of the world’s five largest semiconductor manufacturers within the next five years.

India Seeks to Be Global Chip Powerhouse

The mentioned minister noted that the chip-making industry is a very complex market. In this context, he separately stated that global value chains and global supply chains are extremely complex in the current environment. After these statements, the minister said that New Delhi expects to become one of the five largest semiconductor manufacturers in the world within the next five years.

Data from the analytical company TrendForce shows that as of December last year, Taiwan held about 46% of the world’s capacity for making the mentioned products. The corresponding indicator of China is 26%. South Korea’s share in the global semiconductor manufacturing structure is at around 12%. The corresponding figures for the United States and Japan are 6% and 2%, respectively.

It is worth noting that the current configuration of geopolitical reality creates a kind of space of opportunity for India. Currently, the state of relations between the United States and China is showing a deterioration tendency. As part of this process, Chinese companies’ access to advanced chips from the US and allied countries that joined the relevant measures was limited. In the context of the response, Beijing has revised its strategy for exporting minerals needed for the semiconductor industry. In this case, restrictions are also implied. The negative situation in the plane of relations between China and the United States shows no signs of ending soon. Against this background, many companies are seeking to diversify production outside of China, but at the same time maintaining a presence in Asia. In this case, India may be a good option for locating manufacturing facilities.

Ashwini Vaishnaw stated that New Delhi sees itself as a trusted partner in the value chain. In this context, prospects for cooperation with manufacturers of electronic devices, industrial and defense electronics, and power electronics are implied.

Ashwini Vaishnaw also stated that there is global trust in India. It is worth noting that New Delhi has already made some progress in gaining foreign companies whose activities are related to the semiconductor industry. For example, last week, the American chip-making giant Qualcomm opened a new design center in Chennai. This facility will focus on the development of wireless technologies. Also, as a result of the operation of the design center in India, 1,600 jobs will be created.

Cristiano Amon, Qualcomm CEO, said during a conversation with media representatives that this company started investing in India even before it became popular. He also noted that the firm has been building its presence in the mentioned country for more than ten years. Cristiano Amon stated that many Qualcomm chips were developed in India. He noted that his company’s presence in the specified country generates opportunities for a number of local firms.

Ashwini Vaishnaw says that what some people call friend-shoring, he calls trust-shoring. This was said in the context of New Delhi’s activities to gain foreign players in the local semiconductor industry.

Last week, Indian Prime Minister Narendra Modi inaugurated three semiconductor plants. One of these factories is a joint venture between local Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp. (PSMC). PSMC Chairman Frank Huang announced his intention to develop India’s first semiconductor chip by 2026. According to him, microcircuits created in China and produced at Indian manufacturing facilities can form a strong and significant New Delhi presence in global value chains. Frank Huang is convinced that India will be able to become a semicon hub for the whole world.

Ashwini Vaishnaw showed his equanimity when, during a conversation with media representatives, he was asked about the issue that some investors were expressing concern that New Delhi was still lagging in microcircuits production and needed to take the development path in the appropriate direction. The minister said that the global semiconductor sector will be worth $1 trillion over the next seven years. According to him, to achieve the mentioned indicator, a large talent pool and an increase in production capacity are needed, which can be provided by India. The minister also noted that the current moment is absolutely the right time to operate in the semiconductor industry. Separately, he underlined that New Delhi has already managed to form trusting relationships with the entire specified industry at the global level.

Last November, Apple supplier Foxconn, based in Taiwan, announced its intention to invest more than $1.5 billion in India. The firm said the move would be made to meet operational needs.

Ashwini Vaishnaw says that companies around the world perceive India as a natural destination for making the next investment decision. He confirmed the information that appeared in the media that the local government is reviewing proposals for the production of semiconductors totaling up to $21 billion.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.