“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 of semiconductors and many large semiconductor companies are based in the US. Almost all US semiconductor companies have R&D and design centers in India. Some companies including Micron have also started manufacturing in India.”
The partnership between the US and India is a step towards diversification of the global semiconductor supply chain over 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, even though faced with multiple regulatory hurdles, has also started to rise in prominence.”
A critical global supply chain at stake
With the ongoing global digital transformation, semiconductors have emerged as the backbone of industries spanning from automotive to healthcare. The pandemic laid bare the fragility of the semiconductor supply chain, triggering global shortages that disrupted industries across the board.