Prime Minister Narendra Modi is visiting Singapore at a time when India has taken steps to encourage the semiconductor industry by announcing a massive package of subsidies to lure foreign chipmakers. The main objective is to make India a chip-manufacturing hub and snatch the potential leadership from China. As Artificial Intelligence is taking a massive surge, chip manufacturing is considered the most important business shortly. It will give India a lead in business and geopolitical areas if it becomes an important player in this field.
India To Take On China?
Though Taiwan is the biggest manufacturer of semiconductors, China is emerging as the next leader with state-controlled Semiconductor Manufacturing International Corporation(SMIC) taking important strides in manufacturing 7-nanometer chips since 2021 and developing 5-nanometer chips using alternative methods like quadruple patterning.
China Trails Taiwan By 3 Years
China’s assertion and its pace in the semiconductor industry can be gauged by the fact that SIMC trails behind the world’s largest chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) by just three years in advanced logic chip production. Established in 2000, the Shanghai-headquartered Chinese company provides semiconductor foundry and technology services to global customers on 0.35 micron to FinFET process node technologies. Besides, SIMC has created a formidable innovation ecosystem through collaboration and partnerships with both industry and academia.
Union Budget Increases Allocation
According to geostrategic experts, India has the capacity and willingness to take on China and develop itself as a manufacturing hub of semiconductors. Finance Minister Nirmala Sitharaman increased the allocation for the scheme to support semiconductor and display manufacturing in the Union Budget 20234 by 130% to Rs 690.3 million.
Subsidy For Chip Manufacturers
Under the program, the fiscal incentive of 50% of the project cost is available to companies, consortia, or joint ventures for setting up semiconductor fabs in India of any node size. Besides, a fiscal incentive of 50% of the project cost is also available for setting up display fabs of specified technologies in India.
India: Ambitious Plans For Chip Manufacturers
If reports are to be believed, India has the potential to establish additional facilities in the semiconductor assembly, testing, and packaging (ATP) segment in the next five years. It can attract fabs producing legacy semiconductors at 28 nm or above. If India manages to do so, it can have 20% of the world’s integrated circuit (IC) design workforce, comprising over 125,000 employees.
How Can Singapore Help India?
Singapore can help India achieve this ambitious plan. Singapore can help India also because its semiconductor industry is sophisticated, but limited due to its small geographical size. Its universities offer specialized programs in microelectronics, IC design, and semiconductor engineering. They can help Indian educational institutions in developing similar programmes that cater to the growing needs of India’s semiconductor industry.
The Singapore-based companies can outsource parts of their manufacturing processes, such as assembly and testing, to India. India has the advantage of lower costs. In return, New Delhi can get the benefit of advanced technologies and processes developed in Singapore, augmenting its semiconductor manufacturing capabilities.
Will Singapore Help India Set Up Wafer Fab Parks?
Singapore can also help India in setting up Wafer Fab Parks, industrial zones specifically designed for semiconductor manufacturing. These Fab Parks can be equipped with state-of-the-art infrastructure and tailored services to attract top global semiconductor companies.
Singapore has several reputed semiconductor equipment and material manufacturers, like Soitec and Applied Materials. Indian companies can join hands with chipmakers in Singapore and gain access to advanced semiconductor manufacturing technologies and materials.
Singapore has emerged as a major player in the global semiconductor market as it manufactures about 10% of the world’s semiconductors, 5% of global wafer fabrication capacity, and 20% of semiconductor equipment production. Major global semiconductor companies, including MediaTek, Qualcomm, Broadcom, GlobalFoundries, and Micron, have established their operations in the country. The island nation has a complete semiconductor value chain, from IC design to assembly, packaging, testing, and wafer fabrication.
