According to Nikkei Asia, India and Thailand have launched a full-scale semiconductor manufacturing investment race to win a place on the Asian chip manufacturing map.

India is emerging as an alternative and is exploring every opportunity to become a major player in the supply chain amid the China-US chip war.

Earlier, on July 28, Indian Prime Minister Narendra Modi (Narendra Modi) delivered a speech at the SemiconIndia 2023 industry event, demonstrating the advantages that India offers to the global chip industry.

“Who could be a more trusted partner than the world’s largest democracy?” he asked in a speech.

“As India continues on its reform path, new opportunities will be created. India is emerging as an excellent leader for semiconductor investments,” Prime Minister Modi was addressing the inaugural ‘SemiconIndia 2023’ in Gandhinagar, Gujarat express.

In 2021, the Government of India has approved a revised plan for semiconductor and display manufacturing development with an expenditure of Rs. 76,000 crore, according to a statement released by the Ministry of Information Technology and Electronics.

The program aims to provide attractive incentive support for companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors/silicon photonics/sensors, semiconductor packaging, and semiconductor design.

In order to make India the next chip manufacturing industry, the Indian government approved Micron Technology’s proposal on June 14 to invest 1 billion rupees to set up a semiconductor department. 225.16 billion rupiah ($2.75 billion). The Micron manufacturing facility will produce DRAM, flash memory and solid-state devices, the statement added.

Taiwan’s Hon Hai Precision Industry Co., also known as Foxconn, is partnering with U.S. chip-making equipment maker Applied Materials to produce such machinery in Karnataka, Nikkei Asia reported.

Concerns remain about infrastructure such as India’s electricity. Foxconn has canceled its independent semiconductor partnership in India, underscoring mixed emotions in the industry.

But Noboru Yoshinaga, executive vice president of Disco, a Japanese chipmaking equipment maker, said the fact that U.S. companies had opened factories in India showed that “the tide has changed”.

EU Electronics and Information Technology Minister Ashwini Vaishnaw told Nikkei Asia in July of plans to bring semiconductor capacity into the country and develop local industries.

“It’s important that we have some initial success so that (lessons learned) can be used in subsequent projects,” Vishno said. He cited India’s large number of semiconductor design engineers trained by the country’s polytechnics.

India is deepening its partnership with Japan, which has strong companies in front-end processes and chip-making equipment. In July, the two governments signed a memorandum of understanding on promoting cooperation in the semiconductor supply chain, Nikkei Asia reported.

Meanwhile, in Thailand, Narit Therdsteerasukdi, who is in charge of foreign investment policy as secretary-general of the Board of Investments, called semiconductors one of the most important commodities.

Chip companies are expected to benefit from the Thai government’s expanded corporate tax breaks. For example, upstream supply chain companies entering Thailand are now exempt from paying corporate tax for up to 13 years, compared with the previous period of up to eight years.

Thailand is very concerned about drawing companies that are engaged in front-end processes, such as designing semiconductors and etching wafers. These processes are considered to be more technologically advanced than back-end processes, including dicing and packaging, according to Nikkei Asia.

Thailand is also developing a local industry, bringing together electric vehicle assembly plants and suppliers. Electric vehicles are expected to contain more semiconductor devices than gasoline-engined vehicles, so the local EV industry will give Thailand an advantage in attracting capacity.

Governments such as those in India and Thailand have adapted to the shift in chip companies’ stance. According to “Nikkei Asia”, Narit said that Thailand is regarded as a neutral country and can avoid tensions between China and the United States.

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