The Union Cabinet, chaired by Prime Minister Narendra Modi, on Monday approved Kaynes Semicon Pvt Ltd’s proposal to set up a semiconductor unit in Sanand, Gujarat, with an investment of ₹3,300 crore.

The proposed unit, under the India Semiconductor Mission (ISM), will produce nearly 60 lakh chips per day. The chips produced in this unit will cater to a wide variety of applications, including industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones.

According to PM Modi, the country has the potential to fulfil the dream of developing a ‘Made in India’ chip for every piece of equipment. The first indigenously-developed chip is set to arrive in the country by the end of this year. In March, PM Modi laid the foundation stone of three semiconductor projects worth ₹1.25 lakh crore.

Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat and one semiconductor unit in Morigaon, Assam.

CG Power is setting up one semiconductor unit in Sanand. These units will produce lakhs of direct and indirect jobs. According to the Ministry of Electronics and IT, construction of all four semiconductor units is progressing rapidly and a robust semiconductor ecosystem is emerging near the units. “These four units will bring an investment of almost ₹1.5 Lakh crore.

The cumulative capacity of these units is about 7 crore chips per day,” according to the ministry. The Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India was notified in 2021 with a total outlay of ₹76,000 crore. As per reports, India’s semiconductor-related market will reach $64 billion in 2026, nearly triple the size in 2019. Union Railways and IT Minister Ashwini Vaishnaw said recently that in the next five years, the country will become one of the biggest semiconductor hubs in the world.

–IANS

This story is based on an IANS-syndicated feed. 

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In a development that will enrage China, Indian and Taiwanese government officials met to discuss the chip shortage issue is expected to stretch into 2023, and importantly for India, negotiate a proposal that would bring a chip facility worth $7.5 billion to India.

India and Taiwan are in talks to bring chip production to the region, as well as tariff reductions on components used to make semiconductors by the end of the year will antagonise China.

In 2018, India and Taiwan signed a bilateral investment agreement to increase revenue and strengthen economic connections between the two countries and as of now the trade between the two countries stands at $5.7 billion in the year 2020 and is bound to increase in the coming years.

According to the latest report by Bloomberg, Indian and Taiwanese government officials are working on a proposal that would bring a chip facility worth $7.5 billion to India, ensuring a seamless supply of everything, including 5G devices and electric cars. India is currently looking at prospective places with enough land, water, and manpower.

If the plan goes through, the government will fund 50 per cent of construction expenditures starting in 2023, as well as providing tax benefits and other incentives like reduced corporate tax. However, Taiwan has concerns about a lack of ecosystem for building up a chip production unit in India and expressed concerns about water, as well as electrical availability.

As the world wants to get rid of China’s hold over the supply chian, Taipei wants to move quickly on a bilateral investment pact that would involve tariff reductions on dozens of semiconductor-related products and a broader trade agreement. However, the details about the discussions between both countries are not being disclosed because its own significance in the context of China.

China has been increasingly beligirent and has consistnatly violated the Tiwanise air space in recent times but it is also afraid of  countries that have democracy strengthening their economic and military ties to counter the red menace.

For a long time India had adopted a non-threatning policy against China asit considors Taiwan as its own territory, hence it has been hesitant to move forward. However, now the United States wats to shore up chip supplies, establish supply networks across democracies and increase military capabilities in the region, the dynamics have changed.

However, after the 2020, Galwan valley clash between the Indian Army and the PLA, India has taken a more assertive attitude against China and is wants to establish a framework for a comprehensive trade agreement spanning commodities, services, and investments with Taiwan.

India wants to become more self-reliant on chips and is pushing to attract high-tech investments, while Taiwan wants to enhance its diplomatic footprint around the world as it pushes back against China and the Quad summit and the formation of AUKUS would only add to its impetus.

The shortage in nicro chips has impacted automobile production, and supply shortage would further impact passenger vehicles sale volumes in September and as per a research, the demand for semiconductors in India is expected to reach $100 billion by 2025, up from $24 billion now.

If India wants to ensure there is no hindrance in its requirement of semiconductors the time has come to start developing a chip design business before establishing production plants.

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In a bid to curtail China’s stronghold over the safe supply chain for semiconductors, leaders of the Quad nations who will be meeting in Washington have agreed to work together and at the same time are looking forward to broadening scope against China in the Indo-Pacific.

Amid the Coronavirus, the Quad may soon work out some resilient, diverse, and secure technology supply chains for hardware, software, and services that are of utmost importance to their national interest, reports Nikkei.

A joint statement provides further details on the common principle to be applied for technological development that states that “the technology needs to be designed and developed in such a manner that it is shaped and shared by the countries on democratic values.”

Even though China is the target, the statement makes no direct mention of the ruthless communist state. However, there is an indirect reference to China’s use of its inappropriate technology and the statement stresses the ongoing challenges regarding illicit transfer and theft of technology which undermines the foundation of technological development.

The statement is very clear in its objective wherein the Quad is looking forward to launching a joint initiative for determining their capacity and identifying their vulnerability in supply chain security for semiconductors.

As of now the US and Japan have only 30% of the chipmaking capacity, while India and Australia do not have any leading chipmakers and India is heavily reliant on China.

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