As China and US are engaged in the chip war, India has come
out as an alternative option and is also exploring every opportunity to be
recognized as a major player in the supply chain.
Earlier, on July 28, Prime Minister Narendra Modi addressed
SemiconIndia 2023 industry event where he showed up the strengths his country
has to offer the global chip industry.
"Who can be a more trusted partner than the world's
largest democracy?" he asked in a speech.
“As India moves forward on the path of reform, new
opportunities will be created. India is becoming an excellent conductor for
semiconductor investments,” PM Modi said addressing the inaugural session of
‘SemiconIndia 2023' in Gandhinagar, Gujarat.
In 2021, the Indian government approved the Modified
Programme for Development of Semiconductors and Display Manufacturing with an
outlay of Rs. 76,000 crores, as per the statement issued by the It and
Electronics Ministry.
The program aims to provide attractive incentive support to
companies that are engaged in silicon semiconductor Fabs, Display Fabs,
Compound Semiconductors/silicon photonics/sensors, semiconductor packaging, and
semiconductor design.
In a bid to make India the next chipmaker industry, the
government approved the proposal of Micron Technology on June 14 for setting up
a semiconductor unit with a capital investment of 2.75 billion dollars. This
manufacturing facility of Micron will manufacture DRAMs, Flash memories, and
Solid-State Devices, the statement added.
According to Nikkei Asia, Taiwan's Hon Hai Precision
Industry, or Foxconn, is reportedly teaming up with American chipmaking
equipment maker Applied Materials to produce such machinery in the state of
Karnataka.
Deep-rooted concerns persist about India's infrastructure,
such as electricity. Foxconn has scrapped a separate semiconductor tie-up in
India, underscoring the industry's mixed feelings.
But the fact that American players are setting up shop in
India shows that "the tide has changed," according to Noboru
Yoshinaga, executive vice president at Japanese chipmaking equipment maker
Disco.
Ashwini Vaishnaw, Unnion minister of electronics and
information technology, told Nikkei Asia in July of plans to draw semiconductor
capacity into the country and develop the local industry.
"What is important is we must have a few initial
successes so that the [lessons] can be used for the subsequent projects,"
Vaishnaw said. He cited India's wealth of semiconductor-designing engineers
trained by the country's institutes of technology.
India is deepening its partnership with Japan, which has
companies strong in front-end processes and chipmaking equipment. The two
governments signed a memorandum of understanding in July on promoting
semiconductor supply chain cooperation, reported Nikkei Asia.
Meanwhile, in Thailand, Narit Therdsteerasukdi, who is in
charge of foreign investment policy as secretary-general of the Board of
Investment, has called semiconductors one of the most critical goods.
The Thai government has expanded corporate tax breaks that
chip companies stand to benefit from. A company upstream in the supply chain
that enters Thailand is now exempt from corporate taxes for up to 13 years, for
example, where once the break ran for only up to eight years.
Thailand is keenly focused on drawing companies that engage
in front-end processes, such as designing semiconductors and etching wafers.
These processes are considered more technically advanced than back-end
processes, which include dicing and packaging, as per Nikkei Asia.
Thailand is also developing a local industry bringing
together electric-vehicle assembly plants and suppliers. EVs are expected to
contain more semiconductor devices than gasoline-engine cars, so a local EV
sector would give Thailand an advantage in wooing capacity.
India and Thailand are among a collection of governments
that have become well-attuned to the shifting stances of chip companies. Narit
said Thailand is seen as a neutral country to take refuge from the
Sino-American tensions, according to Nikkei Asia.