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India must prioritize semiconductor investments in global value chains: Report
Washington-based think tank suggests India must enhance semiconductor investments to become a key player in global value chains.
India must prioritize semiconductor investments in global value chains / UnSplash
India must prioritize investments to build on its position as a significant player in the global semiconductor value chain, according to a report by a US-based think tank.
Commissioned by the governments of the US and India for their joint initiative on Critical and Emerging Technology (iCET), the report was unveiled by President Joe Biden and India’s PM Narendra Modi.
The report aimed at assessing India’s “readiness” to assume a greater role in global semiconductor value chains. It also suggested ways through which the Indian government could attract more semiconductor investments.
The Information Technology and Innovation Foundation (ITIF), which conducted the analysis, concluded that over the next five years, India could expand its position in the semiconductor assembly, test, and packaging (ATP) segment by adding as many as five dedicated facilities. Labs that produce legacy semiconductors in the 28 nanometers (nm) or higher range.
ITIF suggested that with investments, India could build its presence as a major player in the semiconductor industry. To capitalize on the opportunity, the government needs investment which will come through enhanced regulatory stability and business environment, the foundation said in the report.
It also recommended several policy steps including, investing in low-cost energy, water accessibility, and infrastructure; improving ease of business and incentivizing businesses to move manufacturing facilities to India, and developing local value chains that support semiconductor manufacturing.
Currently, China is the global superpower when it comes to manufacturing semiconductors. The US has tried to curb China’s access to microchip design tools.
In late 2023, Biden reaffirmed Washington’s “commitment to strengthening” the semiconductor supply chain through collaborative efforts with key nations including India.
“As I mentioned earlier, to mark a historic new phase in our partnership of our countries, we committed to work together to strengthen the semiconductor supply chain with India, Japan, the Republic of Korea, and Singapore. We have launched new initiatives to shape the technologies and standards that will transform the future,” he said at the APEC CEO Summit in San Francisco in November 2023.
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