US CHIPS Act will boost India's semiconductor thrust, say experts

Even as India is setting itself up to become self-reliant in semiconductor chips, US President Joe Biden signed a $280 billion bill to boost American high-tech production in a bid to reduce reliance on China.

This, Indian experts, believe, will complement Indian efforts in this space and further boost the Semiconductor India Programme.

K Krishna Moorthy, CEO and president of the India Electronics and Semiconductor Association (IESA), says 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. He said the CHIPS Act underlines important parts of India's semiconductor push and covers a gamut of activities that need to be supported.

“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," he said.

“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.

Rajiv Khushu, an industry expert, said the US legislation will have a positive impact in India, especially considering there is no semiconductor ecosystem in India — we are currently fully reliant on imports.

“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 said.

He said the semiconductor supply chain is a global one, with several countries contributing to it, and said he foresees a situation in which we won't be dependent on a single nation for semiconductor needs.

“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 said.