Technology

How US CHIPS Act will help India become self-reliant in semiconductor industry

As India is setting itself up to become self-reliant in semiconductor chips, this move will complement Indian efforts in this space and further boost the Semiconductor India Programme, according to Indian experts

How US CHIPS Act will help India become self-reliant in semiconductor industry

Representational image. News18

New Delhi: US President Joe Biden on Tuesday signed a USD 280 billion bipartisan bill to boost domestic high-tech manufacturing, part of his administration’s push to boost the nation’s competitiveness over China.

As India is setting itself up to become self-reliant in semiconductor chips, this move will complement Indian efforts in this space and further boost the Semiconductor India Programme, according to Indian experts.

K Krishna Moorthy, CEO and president of the India Electronics and Semiconductor Association (IESA), said a closer reading of the US CHIPS Act shows that there is a greater thrust on research and investment in STEM (science, technology, engineering, and mathematics) education, CNBC TV-18 reported.

The Act underlines important parts of India’s semiconductor push and covers a gamut of activities that need to be supported, Moorthy stated.

“If you look into India’s policy, you will see all these elements — there is design-linked incentive for creating the design ecosystem, there is huge manpower development or skilling activity that has been budgeted in addition to the subsidies that are being offered in the policy,” CNBC TV-18 quoted Moorthy as saying.

“Semiconductor shortage has already started easing. Many products have gone back to the original 4-8 weeks kind of lead time but there are other parts which are still having long lead time which is a matter of concern,” Moorthy added.

Noting that the US legislation will have a positive impact in India, Rajiv Khushu, an industry expert, said “Having said that we have couple of fabs which are running in Mohali and Bengaluru. However we don’t have a strong ecosystem like China, Taiwan or US for that matter”.

He further said that the semiconductor supply chain is a global one, with several countries contributing to it. “If you see from incentive perspective, and if you combine both the federal and state incentives, I think India has one of the best incentives in the whole world. So I think India’s incentives will complement what US is trying to do,” Khushu said.

“The US announcement will have a ripple impact on India as well because most of the global companies have their second largest design centres in India. So the US and Indian policies, when it comes to chips, will complement each other,” he added.

Flanked by scores of lawmakers, union officials, local politicians and business leaders, Joe Biden feted the legislation, a core part of his economic agenda that will incentivise investments in the American semiconductor industry in an effort to ease US reliance on overseas supply chains for critical, cutting-edge goods, The Associated Press reported.

“The future of the chip industry is going to be made in America,” Biden said on Tuesday, referring to the diminutive devices that power everything from smartphones to computers to automobiles. The legislation sets aside USD 52 billion specifically to bolster the US computer chip sector.

The bill has been more than a year in the making, but finally cleared both chambers of Congress late last month with significant bipartisan margins. The Senate passed it 64-33, with 17 GOP senators supporting it, while the House quickly followed suit with a 243-187 vote that included 24 House Republicans in favor, even though party leaders began urging their ranks to vote against it after Democrats advanced a separate sweeping bill focused on climate and health care.

(With inputs from agencies)

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