As the US and India work together to address supply chain issues for semiconductors, the Joe Biden administration’s offer to help India increase its manufacturing capacity for semiconductors looks to be nothing more than lip service, according to the Chinese state-run newspaper Global Times.
During her visit to India this week, US deputy assistant secretary for South and Central Asia, Afreen Akhter, declared that they will support India in expanding its capacity for semiconductor production.
Leading a trade mission for semiconductors to India, Akhter spoke with prominent leaders there.
In order to entice chip companies to invest in manufacturing in India, a number of advantageous policies have been implemented. To encourage domestic manufacture, the government unveiled a 76,000 crore performance linked incentive (PLI) scheme in the semiconductor industry last year.
China experienced its largest-ever monthly decrease in chip manufacture in August as a result of Covid limitations and waning demand, while India and the US increase their local semiconductor manufacturing. Additionally, it was the second month in a row that semiconductor manufacturing declined. The output plummeted 16.6% to 27.2 billion units in July.
In the meantime, the Gujarati government has teamed up with Vedanta and Foxconn with the goal of investing 1.54 lakh crore to become self-sufficient in the semiconductor manufacturing industry. According to a report by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, India’s semiconductor component market is likely to reach $300 billion in cumulative revenues by 2026 as “Make in India” and production-linked incentive (PLI) schemes will increase local sourcing of semiconductors in the coming years.
“First, the assistance that Akhter said the US would provide to India may not be delivered on,” it added.
“Even as the US chose India as a partner in semiconductor cooperation in geopolitical calculations, this doesn’t mean it will really help India to boost the semiconductor sector,” the report mentioned.
The real question India faces is if it wants to upgrade its chip manufacturing sector and move toward the upstream industrial chain, “it must build up a solid industry basis, instead of pinning its hope on US lip service”.
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