New Delhi, March 11: With the cross-border chip shortage—or semiconductor shortage, to be more specific—that the world is facing right now comes an opportunity to emerge as a key player in its production, and India is no stranger to that fact.
To ramp up the progress of both India and the US in the global semiconductor market, a MoU for innovation and supply of semiconductors was signed on March 10. Actually, signing the treaty is one of the many strategic tasks that US Secretary of Commerce Gina Raimondo is scheduled to perform on her current 4-day visit to India.
She also commented on the desire of both nations to scale up their expertise in the semiconductor industry and how the US is looking forward to partnering with a trusted technology partner like India for not just the manufacturing of semiconductors but the entire electronics supply chain.
It is said that in today’s world, if software is eating the world, then semiconductors are the teeth, which is so true when humans pay attention to the day-to-day things they are interacting with, from smartphones to cars, from refrigerators to laptops, and the use of semiconductors in everything.
In 2020, the world realized the importance of semiconductors as the COVID crisis accelerated their shortage, despite having an abundance of silicon, the raw material from which semiconductors are made.
In the early stages of the chip shortage, the United States realized its inability to manufacture semiconductors and its reliance on other countries for the same. The nation has long been a home to “fabless” companies, an acronym used in the semiconductor industry to describe companies that design the chips, which easily justifies the 47% share that the US owns in global sales of semiconductors. Doing this, the US didn’t manage to establish enough foundries to manufacture the chips and instead relied on outsourcing the task.
On the other hand, Taiwan, with major semiconductor manufacturing companies, excels in the industry today, which is considered one of the key reasons why China is claiming its authority over the island nation.
China, being aware of the importance of the semiconductor, has invested a staggering 1.4 trillion dollars in the ambition to build a homegrown semiconductor industry by 2025.
For so long now, the US has been trying to resolve the problem the chip shortage brought to the country while keeping a close eye on China’s development in the industry.
For now, is facing a major setback in the chip industry as the country does not have the infrastructure to live up to the global standard for the manufacturing of semiconductors. To counter such setbacks, the IT Ministry in recent years has come up with various schemes and investments to back the corporate entities bringing the proposal of foundries.