Will major semiconductor deals challenge China-Taiwan’s hegemony in the chip market, according to the India-US Tech Alliance?

It is thought that the newest India-US tech alliance formed during Prime Minister Narendra Modi’s visit and semiconductor announcements might weaken China and Taiwan’s hegemony in the chip business.

India and the US both have significant advantages in the semiconductor industry. While the US is home to several of the top chip manufacturers in the world, India has a huge and expanding pool of brilliant engineers. So, based on all the information that was disclosed on June 22 regarding the relationship between the two nations, it seems that by working together, they may be able to create a more reliable and varied semiconductor supply chain.

The latest announcements indicate that the US and India are serious about cooperating to reduce China and Taiwan’s dominance in the semiconductor business, even if it is still too early to judge how effective the India-US tech alliance will be in doing so.

THE EFFECT

According to Sanjay Gupta, chairman of the India Electronics and Semiconductor Association (IESA), the establishment of Micron’s semiconductor chip testing and manufacturing facility in India represents a significant step towards reducing the dominance of Chinese and Taiwanese companies in the global semiconductor market.

“While China and Taiwan have historically played a significant role in the semiconductor sector, India’s partnership with Micron represents a change in priorities for international businesses. According to Gupta, India’s expanding role in the semiconductor industry will contribute to a more diverse global supply chain.

And he said, “With Micron’s investment, India strengthens its position as a competitive manufacturing hub, offering an alternative.”

He contends that by luring multinational semiconductor behemoths like Micron, India can use its know-how and technology to improve its own capabilities. This lessens dependence on Chinese and Taiwanese firms for the import of semiconductors, reducing their hegemony. Additionally, the relationship encourages national R&D activities and technical innovation. It will promote entrepreneurship, foster the development of local talent, and create an environment that is favorable for the success of domestic semiconductor companies, according to Gupta.

In addition, he emphasized how competitive and vibrant the semiconductor sector was, noting that “Chinese and Taiwanese firms have a well-established infrastructure, considerable expertise, and substantial investment in research and development. They continue to play a significant role in the global semiconductor sector despite their unflinching dominance.

According to Sailesh Lachu Hiranandani, chairman of SRAM & MRAM Group, who announced a Rs 2 lakh crore investment in Odisha last year to establish a semiconductor factory, the India-US tech partnership declaration was not only noteworthy from an industrial standpoint but also strategically important.

“The joint announcement made by America and India signifies a landmark in the bilateral relationship and has significant ramifications for both countries,” said Hiranandani. “It is a strategic move to counterbalance China’s growing dominance and influence in the Indo-Pacific region.”

He said that the alliance offered India a chance to improve its strategic partnerships and increase its standing on the international scene. He also said that the alliance would open the door for technical development, defense collaboration, and economic expansion that would promote US investment, commerce, and technology transfer to India, which may support the country’s economic growth and spur creativity.

Importantly, Hiranandani stated, “it will also provide access to cutting-edge defense technologies, enhancing our defense capabilities and national security.”

When discussing the investment announcements, which included those from Micron Technology, Applied Materials, and Lam Research, Rajeev Chandrasekhar, the state minister for electronics and IT, said they were “very significant and tectonic in the way they accelerate India’s semiconductor ecosystem growth.”

Additionally, it helps India become a more reliable partner in the semiconductor and electronics supply chain. We are confident that in the upcoming years, the youth who will enter the workforce as VLSI engineers and the talent from our education ecosystem will make India a leader in electronics and semiconductors, as well as continue the growth and global presence in the innovation, IT, and ITeS segments of the digital economy, according to Chandrasekhar.