| Introduction: Contextual Introduction Body: Role of semiconductor supply chain & India’s efforts to develop semiconductor industry Conclusion: Way forward |
Semiconductor chips are indispensable to modern technological systems, driving industries from automobiles to defense. The global semiconductor supply chain is dominated by a few countries, particularly Taiwan, South Korea, and the U.S., which hold a strategic position in the manufacturing of advanced chips.
Role of Semiconductor Supply Chains
- Enhance Technological Sovereignty: India will reduce its reliance on imports for critical technologies and components, particularly in defense and telecommunications. This will bolster India’s autonomy in decision-making during geopolitical crises.
- Strengthen Economic Resilience: Diversifying the supply chain helps mitigate the risks associated with supply disruptions, as seen during the pandemic. A strong semiconductor industry can shield India’s manufacturing sectors, such as automotive and electronics, from future global shortages.
- Foster Regional Partnerships: The semiconductor agreement with Singapore is a vital component of India’s Act East Policy and its broader Indo-Pacific vision. By collaborating with regional partners, India strengthens its influence in Southeast Asia, positioning itself as a key player in the global semiconductor race.
India’s Efforts to Develop Its Semiconductor Industry and Reduce Dependency
- Indigenous efforts: India, recognizing the strategic importance of semiconductors, launched the India Semiconductor Mission in 2021 with an investment of ₹76,000 crore ($10 billion) in incentives to develop the semiconductor ecosystem.
- Partnerships with Global Firms: The government has announced partnerships, such as the Tata Group’s collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to set up a fabrication plant in India.
- Attracting Foreign Investment: India’s land and labor costs, which are more competitive than those of countries like Singapore, offer a significant advantage in attracting semiconductor companies looking to diversify their operations.
- Learning from Singapore’s Model: Singapore’s success as a semiconductor hub stems from its early investments, strong infrastructure, and skilled workforce. India can learn from Singapore’s model by setting up specialized Wafer Fab Parks with state-of-the-art infrastructure and talent development programs.
Conclusion
India’s partnership with Singapore in the semiconductor sector holds significant promise for reducing its dependence on established global players and enhancing its role in the global supply chain. This collaboration is critical for India’s long-term geo-economic resilience and technological sovereignty in a world increasingly defined by digital and technological competition.
