India and US team up to boost chip supply

Close on heels of Singapore tying up with India for “cooperation” on semiconductors during Prime Minister Narendra Modi’s visit to the city-state last week, Washington on Tuesday announced a partnership with Delhi to explore supply chain opportunities.

The US state department will partner with the India Semiconductor Mission and the ministry of electronics and IT to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation (ITSI) Fund created by the CHIPS Act of 2022, Washington said in a statement.

The partnership will help create a more resilient, secure, and sustainable global semiconductor value chain, it said.

The Singapore and US deals came ahead of the three-day SEMICON India 2024 summit that gets underway at the India Exposition Mart Ltd in Greater Noida, Delhi-NCR, from Thursday, 11 September.

The initial phase of the US deal includes a comprehensive assessment of India’s existing semiconductor ecosystem and regulatory framework, as well as workforce and infrastructure needs.

The US sees key stakeholders, such as the states, educational institutions, research centers, and private companies, participating in the analysis steered by the India Semiconductor Mission.

The insights gained from the assessment will serve as the basis for potential future joint initiatives to strengthen and grow this critical sector, the US state department said.

The US and India are key partners in ensuring the global semiconductor supply chain keeps pace with the global digital transformation currently underway. Manufacturing of essential products ranging from vehicles to medical devices relies on the strength and resilience of the semiconductor supply chain, it added.

In August 2022, US President Joe Biden had signed the CHIPS Act, a US law that appropriated new funding to boost domestic manufacturing and research of semiconductors in that country.

The CHIPS Act also created the ITSI Fund, which provides the US Department of State with $500 million ($100 million per year over five years, starting in fiscal 2023), to promote the development and adoption of secure and trusted telecommunications technologies, secure semiconductor supply chains, and other programs and initiatives with our allies and partners.

The announcement also comes when India is taking major steps to improve its semiconductor ecosystem.

Seven semiconductor-related plants are coming up in different states across the country.

A cabinet panel in Maharashtra last week approved a $10 billion plan between Israel’s Tower Semiconductor and Adani Group to set up a semiconductor plant at Taloja.

Earlier this month, the government approved a Mysuru-based Kaynes Semicon Pvt. Ltd’s proposal to set up an outsourced semiconductor assembly and test (OSAT) unit in Sanand, Gujarat.

The proposed unit will be set up with an investment of ₹3,307 crore (about $393.45 million).

Under the India Semiconductor Mission, India approved five chip plants: two by Tata in Assam and Gujarat, and one each by Micron, CG Power (both in Gujarat), and RRP Electronics in Maharashtra.