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Review
At the G20 summit in New Delhi last year, US President Joe Biden had a pivotal meeting with Indian Prime Minister Narendra Modi. The two sides of the meeting have conducted a lot of discussions on semiconductor cooperation, and the United States hopes to "take over" the chip stock through India, but will India be up to the task?
This topic involves the pattern of the global semiconductor industry and the strategic layout of the economic development of the two countries, and the background behind it, the content of the meeting and the reaction of the Indian side are worthy of in-depth analysis.
background
The United States has always been the leader of the global semiconductor industry, not only dominating the technology but also being the world's largest chip producer and exporter in terms of market share and export scale.
However, with the change of geopolitical landscape and the implementation of technological blockade policies, the US government has imposed strict controls on semiconductor exports, and the United States announced a decision to ban the export of high-end chips to China in June 2023 to combat China's rise in the semiconductor field.
This decision has led to a structural change in the relationship between supply and demand in the U.S. chip market, which has triggered turmoil in the global chip market, because countries other than China either do not have excessive demand for chips or have weak digestion capacity for chips, so the problem of overproduction of chips in the United States has become increasingly prominent.
At the same time, India, as a representative of the global emerging market economy with a population of 1.4 billion, has accelerated its rapid development and informatization process, and the demand for semiconductor chips has continued to grow, and the Indian government attaches great importance to the development of the semiconductor industry, which is regarded as an important engine for the country's future economic growth, and has naturally become an ideal "take-over man" in the eyes of the United States.
Content of the meeting
During the meeting, Biden and Modi emphasized the importance of the semiconductor supply chain and expressed their willingness to strengthen cooperation between the two countries in this area.
Through the India-U.S. Critical and Emerging Technologies Initiative (iCET), the two countries plan to build an open, reliable, secure, and resilient technology ecosystem and value chain based on mutual trust and understanding to support the common interests and democratic institutions of the two countries, and through this cooperation, the two countries can jointly address the challenges of the global semiconductor market and advance the development of the semiconductor industry.
To achieve this goal, the two countries also announced a number of specific cooperation projects, including NASA and the Indian Space Station Research Organization to collaborate on lunar and Mars exploration missions, the U.S. Department of Energy and India's Ministry of Science and Technology to collaborate on the establishment of a computing center, and the U.S. Department of Health and Human Services and India's Ministry of Health and Family Welfare to advance biotechnology cooperation.
Most notably, U.S. chipmaker Micron Technology plans to invest $800 million in a new semiconductor test and packaging facility in Gujarat, India, which will have state-of-the-art production equipment and technology to increase India's semiconductor production capacity.
In addition, TSMC also announced the construction of a 12nm wafer fab in Bangalore, India. These cooperation projects will help to promote the development of India's semiconductor industry, improve its competitiveness at home and abroad, and promote the development of India's semiconductor industry.
These collaborative projects demonstrate the intent of the United States and India to work more closely together to address the world's challenges and seize global opportunities.
The reaction of the Indian side
Despite India's potential in the semiconductor sector, some companies such as Foxconn have previously suspended their investment plans in India for various reasons.
The Modi government has expressed interest in the US proposal, but whether it can "eat" these chip stocks still needs to consider many factors, such as India's market demand and technological strength are one of the decisive factors. India's current level of industrial development cannot accommodate the huge stock of semiconductor chips transferred from China.
Because India is very weak in the upstream of the semiconductor industry chain, it does not have its own chip manufacturing plant and its own chip design company. India can only rely on imports or foreign capital to meet its own demand for chips, and most of the chips needed by India are low-end or mid-range chips.
The chips exported by the United States are high-end or ultra-high-end, and the supporting equipment required for these chips is strict, while India cannot meet such a series of supporting equipment.
If India accepts the chip cooperation of the United States, it will be like a pawn of the United States, and the United States will not provide India with the most advanced and high-end chip technology, but will only provide finished chips, because the real goal of the United States is not to generously help India's international strength in the field of semiconductors, but to use India to counter China's rise in the field of semiconductors.
In addition, if India accepts high-end chips from the United States, it will lose the motivation and opportunity to independently develop and produce semiconductors, and finally create a situation of complete dependence on American semiconductor products.
In addition, India's policy environment needs to be further optimized to attract more foreign investment and technology into the Indian market. Chip cooperation between India and the United States can only succeed if these factors are fully considered and prepared.
epilogue
The meeting between the leaders of India and the United States has provided an opportunity for the cooperation between the two countries in the field of semiconductors, but whether the specific cooperation can succeed still requires further communication and efforts from both sides.
This is an important opportunity and a challenge for India. When considering the acceptance of these chips, the Modi government must fully assess the impact on national security, technological independence, and economic development.
At the same time, it is also necessary to take active measures, such as strengthening local R&D capabilities, improving the investment environment, and optimizing the industrial layout, so as to ensure the smooth implementation of this cooperation plan and ultimately achieve a win-win situation for both parties.
If it can successfully "take over" the chip stock of the United States, it will help promote the development of India's semiconductor industry, but the cooperation between the United States and India in the field of semiconductors seems to be very beautiful, but in fact there are many risks and hidden dangers, India should remain sober and rational, and not be tempted by the United States' "high-end chips", after all, there is an ancient Chinese saying that "there is no pie in the sky".
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