India urged to strengthen ties with Taiwan and Japan for semiconductor growth

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India urged to strengthen ties with Taiwan and Japan for semiconductor growth

India urged to strengthen ties with Taiwan and Japan for semiconductor growth

Industry News
Sep 16,24

Japan is contributing to the development of India's semiconductor sector by providing training to Indian workers, while Taiwan is investing in semiconductor clusters in Southeast Asia.

India urged to strengthen ties with Taiwan and Japan for semiconductor growth

India should enhance its partnerships with Taiwan and Japan to advance its semiconductor industry, according to a report by Elara Securities. Taiwan, a global leader in semiconductor manufacturing, dominates 78% of the world's fab production and 53% of the assembly, testing, and packaging (ATMP) market. However, despite having over 312 leading Taiwanese firms in the sector, their involvement in India's emerging semiconductor industry has been minimal.

The report notes that Taiwan's major semiconductor companies, such as TSMC, have shown limited interest in establishing fabs in India. Geopolitical tensions, particularly in the Taiwan Strait, have prompted Taiwanese firms to diversify their operations to countries like the U.S., Japan, and Germany. For instance, TSMC is currently constructing fabs in Arizona and Germany but has not announced similar ventures in India.

Japan is contributing to the development of India's semiconductor sector by providing training to Indian workers, while Taiwan is investing in semiconductor clusters in Southeast Asia. Strengthening these collaborations could offer the expertise and investment necessary to boost India's semiconductor ecosystem.

The report highlights Tata Group's recent partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC) as a promising development. Tata's collaboration with PSMC aims to establish a 28-nanometer fab plant in India, marking a positive step for the sector.

To attract significant investments, India must improve its infrastructure, manufacturing ecosystem, and regulatory environment. The report also points out concerns about the talent pool, noting that while many Indian students are trained in Taiwan, most prefer to work abroad, hindering the development of a skilled domestic workforce.

With shifting global trade dynamics and increasing wariness of Chinese components, India has an opportunity to position itself as an alternative supplier. Domestically, the demand for semiconductor chips is expected to exceed $100 billion by 2030, driven by the rising need for electronic goods.

(TOI)