“This agreement is an important step in developing the semiconductor ecosystem in India,” said Pareekh Jain, CEO of Pareekh Consulting. “The US is the largest end market for semiconductors and many large semiconductor companies are headquartered in the US. Almost all US semiconductor companies have R&D and design centres in India. Some companies, including Micron, have also started manufacturing in India.”
The US-India partnership is a step towards diversifying the global semiconductor supply chain in the long term, said Akshat Vaid, partner at Everest Group. “Currently, the industry is highly concentrated in a few dominant regions, including Taiwan and South Korea; China, despite facing multiple regulatory hurdles, has also started to gain prominence.”
A critical global supply chain at stake
With the ongoing global digital transformation, semiconductors have become the backbone of industries spanning from automotive to healthcare. The pandemic exposed the fragility of the semiconductor supply chain, triggering a global shortage that affected all industries.