US-India Partnership to Boost Global Semiconductor Supply Chain

By R Anil Kumar

• India, US partner to boost global semiconductor ecosystem

• India and the US have agreed to collaborate on expanding and diversifying the global semiconductor ecosystem. This cooperation aims to bolster the semiconductor supply chain amid ongoing digital transformation. The initial phase includes an assessment of India’s current capabilities and needs, laying the groundwork for future joint initiatives

• New Partnership with India to Explore Semiconductor Supply Chain Opportunities-Office of the Spokesperson, US Department of State

Washington, September 9. 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 (CHIPS Act).

India and the US have struck a deal to jointly explore avenues for the expansion and diversification of the global semiconductor ecosystem. This development positions both nations as pivotal players in maintaining the pace of the digital transformation unfolding worldwide, according to an announcement made on Monday, September 9.

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

India and the US have agreed to collaborate on expanding and diversifying the global semiconductor ecosystem. This cooperation aims to bolster the semiconductor supply chain amid ongoing digital transformation. The initial phase includes an assessment of India’s current capabilities and needs, laying the groundwork for future joint initiatives.

The initial phase includes a comprehensive assessment of India’s existing semiconductor ecosystem and regulatory framework, as well as workforce and infrastructure needs. State anticipates that key Indian stakeholders, such as state governments, educational institutions, research centers, and private companies, will participate in this 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 United States 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. This collaboration between the United States and India underscores the potential to expand India’s semiconductor industry to the benefit of both nations.

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

Key Objectives

According to the US State Department, the partnership aims to explore various opportunities to grow the semiconductor industry, which has become increasingly critical in today’s technology-driven world. By working together, the US and India aim to create a more resilient, secure, and sustainable global semiconductor value chain.

Importance of the Semiconductor Industry

Semiconductors are essential in various technologies, from smartphones and computers to advanced defence systems. The global chip shortage has underscored the need for a robust and diversified semiconductor supply chain. This partnership addresses those challenges by fostering collaboration between the two nations.

Benefits of the Collaboration

Innovation and Research: The collaboration will facilitate joint research and development initiatives, encouraging innovation in semiconductor technologies.

Investment Opportunities: By leveraging the ITSI Fund, both countries will identify and promote investment opportunities to enhance semiconductor manufacturing and design capabilities.

Supply Chain Resilience: The partnership will work to strengthen supply chain resilience, ensuring that both nations can better withstand future disruptions.

Sustainability: Emphasis will be placed on creating a sustainable semiconductor ecosystem, addressing environmental concerns associated with semiconductor production.

This partnership marks a significant step in US-India relations, particularly in technology. As both countries work together to bolster their semiconductor capabilities, they aim to enhance their technological landscapes and contribute to a more stable and sustainable global semiconductor market.