September 27, 2022 4:48 am

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Geopolitical Race Towards Semiconductor Sovereignty

India aims to promote its domestic semiconductor industry at the time when countries like Taiwan, China and US are engaged in the ‘War of Chips’.

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India’s quest to dominate the global technological sector has its basis to the efforts being made for technology advancement in the country. Chip making or Semiconductor industry is one such segment where all the global players are striving to become self-reliant. India is also making efforts to join the global semiconductor race by reducing its dependence on foreign imports.

India is moving fast towards promoting the domestic semiconductor industry amidst the time when countries like Taiwan, China and US are engaging in the ‘War of Chips’.

Why are countries competing in the semiconductor race ?

Semiconductors are integrated circuits or micro-chips, usually made up of Silicon, Germanium and Gallium Arsenide. It is widely used in the electronic industry that form the backbone of any country’s technological progress.

For the technical advancement of any country, high technological components are required in various segments. Self-sufficiency in this department will make any country a global player in communications, healthcare, military systems, energy sector,computer applications, transportation and Artificial Intelligence.

The COVID-19 pandemic heavily disrupted the supply chain of integrated circuits and affected technological growth in many countries, especially India. The lockdown situation thus made us realise the importance of semiconductors for our technical advancement and how every country should move towards its sovereignty.

Dominance in the world by East Asian countries – Taiwan , China , South Korea

The island of Taiwan, which accounts for only one percent of the global GDP, tops in the manufacturing and global supply chain of semiconductors. It accounts for 65 percent of the global supply chain and 90 percent in terms of manufacturing advanced chips. While countries like the US and China produce only 5 percent of the world’s semiconductor chips.

One of the reasons for Taiwan’s dominance in this industry is due to its strong capabilities in the wafer manufacturing and maintaining a complete industrial supply chain. 

Another reason why every country is importing the microchips from this small island is due to the stronghold of Taiwan Semiconductor Manufacturing Company(TSMC). It is the world’s largest chip foundry, which accounts for around 53 percent of the market share. 

Countries moving towards Semiconductor Sovereignty

The US is rapidly moving towards sovereignty in the chip making industry and decoupling their supply chains from China. The Biden administration in one of its biggest efforts has aimed to invest $50 billion to build up its domestic semiconductor industry.

Spain is the latest country to join the global race of chip making, where it will be investing 11 billion euros to promote its domestic semiconductor sector. The country aims to work in alignment with the European Union’s goal of 20 percent manufacturing of semiconductors by 2030.

Europe, UK and US are investing billions of dollars in subsidising their domestic chip making market. They tend to move away from their dependency on Taiwan and China for the microchip imports.

India’s efforts To promote Domestic Semiconductor Industry

A country that is heavily utilising the electrical equipment and fast moving towards a techno maestro, India is making important steps to be self-reliant in this domain.

The AtmaNirbharta vision of PM Modi in the semiconductor segment led to the launch of ‘India Semiconductor Mission’. The programme aims to set up semiconductor Fabs in India and provide financial assistance to the companies that are investing in design and manufacturing of semiconductors in India.

Union Minister for Commerce and Industry Piyush Goyal in his meeting with the venture capitalists in San Francisco, released a statement about India’s move towards promoting Domestic Semiconductor Industry.  

Indian industrialist Gautam Adani in a recent interview talked about how India cannot remain dependent on the global supply chains of semiconductors and requires US assistance in the technology transfer. Using which, India will strive towards self reliance in the semiconductor sector. 

Although India does not contribute in the chip-making segment yet due to its strong software base, it contributes in the designing of semiconductors. With a large pool of trained engineers India can slowly and steadily join the league of semiconductor manufacturing nations.

The Indian Affairs Staff
The Indian Affairs Staff

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