New Delhi

India is taking steady steps to boost its semiconductor ecosystem. The US Department of State recently partnered with India’s Semiconductor Mission to explore opportunities for expanding and diversifying the semiconductor sector, ANI reported. 

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This comes days after India signed a semiconductor ecosystem partnership with Singapore during Prime Minister Narendra Modi’s visit last week. 

The recent announcement by the US also has significance. PM Modi is expected to travel to Washington from Sep 21-24 to attend the Quad leaders’ summit- The Summit of the Future along with a diaspora event. 

“The US Department of State will partner with the India Semiconductor Mission, Ministry of Electronics and IT, Government of India, 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,” the US State Department said in a statement on Monday.

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US Deputy Secretary of State, Kurt Campbell, said that India and the US are more aligned than ever. The two nations are not just collaborating in the semiconductor industry but also working together in sectors such as space and artificial intelligence. 

The collaboration between the US and India will look forward to expanding India’s semiconductor industry which will benefit both nations, according to the official statement.

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“US and India are key partners in ensuring the global semiconductor supply chain keeping pace with the global digital transformation currently underway.”

In August 2022, US President Joe Biden signed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, a US law dedicated to boosting domestic manufacturing and research of semiconductors. 

Watch | US - India team up for chip supply boost

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The CHIPS and Science Act is intended to lure microchip manufacturing back to the US after decades of companies offshoring the technology. Although the country produced close to 40 per cent of the world’s semiconductor supply in 1990, that statistic has slipped to just 12 per cent. 

Taiwan, on the other hand, produces more than 60 per cent of the world’s supply of semiconductors and more than 90 per cent of the most advanced chips, according to the US-based think tank Council on Foreign Relations.

When it comes to India, the country has 20 per cent of the world’s semiconductor design workforce, as per the KPMG report. The semiconductor industry is rapidly evolving and becoming a thriving domestic market in India, all of which are conducive to building an indigenous semiconductor ecosystem. 

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The India Semiconductor Mission was launched in 2021 with a Rs 76,000 crore chip incentive scheme, under which the central government offered half the plant’s capital expenditure costs as subsidy.

Given the critical importance of semiconductor chips, especially after COVID-19, in almost everything, from missiles to mobile phones and cars to computers, the partnerships with Singapore and the US have geo-strategic and geo-economic importance for India. 

(With inputs from agencies)