Cabinet Approves India-Japan Chip Supply Chain Partnership

Cabinet of India has granted approval for a significant MoC between India and Japan

The Union Cabinet of India has granted approval for a significant Memorandum of Cooperation (MoC) between India and Japan, focusing on the development of a semiconductor supply chain partnership. This collaborative effort is designed to encompass various aspects of the semiconductor industry, including research and development (R&D), manufacturing, design, and talent development.

The MoC, which was initially inked in July of this year, reflects the strong cooperation between India’s Ministry of Electronics and Information Technology and Japan’s Ministry of Economy, Trade and Industry. This partnership is aimed at bolstering the semiconductor supply chain, recognizing the pivotal role of semiconductors in driving advancements across various industries and digital technologies.

India’s strategic objective in fostering this partnership is to establish itself as a dependable presence within the semiconductor supply chain. This endeavor is especially significant at a time when many companies are actively seeking to diversify their supply chain away from China, which has been a dominant force in the field of electronics manufacturing for several decades.

In a concerted effort to boost local chip manufacturing, the Indian government has initiated a $10 billion plan. As part of this plan, U.S. memory maker Micron Technology is currently in the process of constructing an assembly and packaging plant in Gujarat. This investment serves to fortify India’s standing in the global semiconductor ecosystem.

Furthermore, India is actively engaging in collaborations with the United States to enhance semiconductor supply chains. A recent bilateral meeting between Prime Minister Narendra Modi and U.S. President Joe Biden reinforced their commitment to establishing resilient global semiconductor supply chains.

Several major global semiconductor companies have announced substantial investments in India. For instance, Microchip Technology, a U.S.-based chip manufacturer, has committed to investing $300 million over the next few years, including the establishment of a new research and development (R&D) facility in Hyderabad. In addition, Advanced Micro Devices (AMD) is planning an investment of up to $400 million in India over the next five years, marking its largest design facility in Bengaluru.

Lam Research, a semiconductor equipment manufacturer, has proposed an initiative to train 60,000 Indian engineers through its Semiverse Solution virtual fabrication platform. Meanwhile, Applied Materials, a global leader in materials engineering solutions, has announced its intention to invest $400 million in establishing a collaborative engineering center in India.

The semiconductor supply chain partnership between India and Japan reflects a strategic and collaborative effort to further develop and strengthen the semiconductor industry in India. This initiative not only enhances India’s presence in the global semiconductor supply chain but also reinforces its status as a burgeoning hub for semiconductor manufacturing and technological innovation.