India and Japan forge semiconductor future, Inking MoU for development!

Union Minister Ashwini Vaishnaw described the agreement as a significant step towards establishing a robust and resilient complete value chain in the semiconductor sector.

India and Japan have recently entered into a Memorandum of Understanding (MoU) to collaborate on semiconductor development. This partnership will encompass various aspects, such as design, manufacturing, equipment research, and talent development in the semiconductor industry.

Union Minister Ashwini Vaishnaw described the agreement as a significant step towards establishing a robust and resilient complete value chain in the semiconductor sector.

“The MoU is on five fronts, viz. semiconductor design, manufacturing, equipment research, talent development, and bringing resilience to the semiconductor supply chain,” said Vaishnaw.

Union Minister emphasized that agreements like the U.S.-India initiative on Critical and Emerging Technology (iCET) and the one with Japan offer clear directional support during talks between industries from both countries. The government’s strategy is evidently centred on supporting industries in India, whether collaborating with the US or Japan, focusing on fostering growth and innovation in critical and emerging technologies.

He further revealed that discussions are underway to finalize a similar agreement with the Japanese company Rapides.

In addition, he highlighted the rapid growth of the semiconductor industry, currently surpassing USD 650 million, and anticipated to reach USD 1 billion within the next five to six years. To meet the surging demand, the industry requires a substantial talent pool and significant growth at multiple locations. Japan perceives India as a dependable partner, possessing complementary strengths, making it an ideal collaboration prospect to address the industry’s needs and leverage mutual advantages.

Further Union Minister emphasized the importance of advanced packaging in the semiconductor industry, stating that the future of semiconductor development will involve sophisticated packaging at various levels. India’s strength lies in its strong design capabilities, boasting over 50 plus designs, making it an appealing destination for semiconductor manufacturing.

Read: Best Semiconductor Stocks in India

India is to sign agreements with institutions like Georgia Tech University, he noted and has already signed one with Caldwell University to build talent for advanced packaging.

After the Japan MoU, other major players have also shown interest in India’s semiconductor sector. Micron Technology plans to invest USD 2.75 billion to set up a semiconductor unit, while Applied Materials will invest USD 400 million in establishing a collaborative R&D centre. These investments signify the growing confidence in India’s semiconductor industry and its potential for further development and growth.

India and Japan’s Digital Revolution: A Strategic Semiconductor Partnership

Strengthening the Global Semiconductor Supply Chain which promises to reshape the future of electronics and information technology.

In a significant stride towards the advancement of the semiconductor industry and digital technology, the Union Cabinet, led by Prime Minister Shri Narendra Modi, recently apprised the nation of a momentous development - the Memorandum of Cooperation (MoC) signed between the Ministry of Electronics and Information Technology of the Republic of India and the Ministry of Economy, Trade, and Industry of Japan. This historic agreement, inked in July 2023, heralds the Japan-India Semiconductor Supply Chain Partnership, which promises to reshape the future of electronics and information technology.

Revolutionizing the Semiconductor Supply Chain

At its core, the MoC aims to fortify the collaboration between India and Japan, recognizing the critical role of semiconductors in the growth of industries and digital technologies. The semiconductor industry serves as the lifeblood of the digital age, powering everything from smartphones to data centers, and this partnership seeks to reinforce this vital supply chain.

The MoC is set to come into effect from the date of its signing, with a five-year tenure, showcasing the long-term commitment of both nations towards semiconductor advancements. It brings together the Governments (G2G) and the business communities (B2B) of India and Japan to explore opportunities for fortifying a resilient semiconductor supply chain and leveraging each other’s strengths.

A Boon for Employment in the IT Sector

In addition to its broad implications for the semiconductor industry, the MoC envisions bolstered collaboration between the two countries, ultimately leading to more employment opportunities in the field of information technology. As the semiconductor sector flourishes, it not only promises technological advancements but also opens doors for skilled professionals, contributing to economic growth and technological innovation.

Background: India’s Semiconductor Journey

India has been diligently working to create a favorable environment for electronics manufacturing. Initiatives like the “Programme for Development of Semiconductor and Display Manufacturing Ecosystem in India” have been launched to support the development of a robust semiconductor and display ecosystem. This program provides fiscal support for setting up Semiconductor Fabs, Display Fabs, and various other semiconductor-related facilities. Furthermore, the “India Semiconductor Mission” is fostering strategies for semiconductor and display manufacturing in the country.

International Cooperation: A Key Pillar of India’s IT Strategy

The Ministry of Electronics and Information Technology (MeitY) has a mandate to promote international cooperation in emerging IT and frontier areas. MeitY has signed various agreements and MoUs with countries worldwide to facilitate bilateral cooperation and information exchange, with the overarching goal of strengthening supply chain resilience and positioning India as a trusted global partner. The MoC with Japan is a critical step in furthering semiconductor-related business opportunities and partnerships between the two nations.

Building on Existing Collaborations

The “India-Japan Digital Partnership” (IJDP) launched in 2018 laid the foundation for cooperation in science, technology, and information and communication technology (ICT). Building on the success of IJDP and the “India-Japan Industrial Competitiveness Partnership,” this new MoC on the “Japan-India Semiconductor Supply Chain Partnership” aims to deepen cooperation in the electronics ecosystem. Recognizing the pivotal role of semiconductors in driving industries and digital technologies, this MoC promises to enhance the resilience of the semiconductor supply chain and strengthen the global technology landscape.

As India and Japan join forces in this semiconductor revolution, the world watches in anticipation of the technological marvels and economic prosperity that this partnership is bound to yield.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.