The Union Cabinet has cleared a Rs 22,500 crore (USD 2.7 billion) investment by American chipmaker Micron for setting up a semiconductor unit in the country
Sanjay Mehrotra, President-CEO of Micron Technology, global leaders in semiconductors on Wednesday met Prime Minister Narendra Modi and said that the meeting with him was “excellent.”
“I had an excellent meeting with PM Modi. I am very impressed with the vision that he has for India and the advances that India is making. We discussed a wide range of topics and we really look forward to greater opportunities in India,” said Mehrotra. Recently, India and the US have signed a Memorandum of Understanding (MoU) on establishing the Semiconductor Supply chain during India – USA 5th Commercial Dialogue 2023, which can help India realize its long-nurtured dream of becoming a hub for electronic goods.
The MoU seeks to establish a collaborative mechanism between the two governments on semiconductor supply chain resiliency and diversification in view of the US’s CHIPS and Science Act and India’s Semiconductor Mission.
The US and China are giants in chip manufacturing. So, this pact with the US to strengthen cooperation in the semiconductor sector to facilitate commercial opportunities and the development of innovation ecosystems is likely to help India immensely.
It can help India align into a more central role in the global electronics supply chain.
The crunch in semiconductors supply began during Covid-19 and went on to intensify in 2021. A Goldman Sachs report suggested that at least 169 industries had been impacted by the global chip supply shortage in 2021.
The crunch has eased now but some disruptions in the supply chain still exist.
Notably, the Union Cabinet cleared a Rs 22,500 crore (USD 2.7 billion) investment by American chipmaker Micron for setting up a semiconductor unit in the country.
Micron is amongst the top semiconductor companies in the world and plans to set up a semiconductor testing and packaging unit – one of the critical jobs in the journey of chip manufacturing – within the country.
Recently, China has also banned Micron which makes semiconductor chips and also works in Artificial Intelligence technology. This was China’s retaliation against US actions.
Increasing competition for dominance between US and China will have spillover effects for countries like India.
From a domestic perspective, this could also prompt a potential realignment of India’s current policy approach on chip manufacturing: which is currently focused, almost entirely, on the manufacture of mature nodes – generally defined as chips that are 40 nanometres (nm) or above and find application in sectors such as the automotive industry – before trying to attempt an entry into the more advanced nodes (smaller than 40nm), which are far more strategic, but require exceptional manufacturing capabilities and project execution skills.
PM Modi also met H Lawrence Culp Jr, Chairman and CEO, of General Electic and CEO of General Electic Aerospace.
GE Aerospace has big plans to ramp up its Indian operations. The company is seeking to consolidate its position as the engine supplier of choice as India’s commercial airliners place record orders for hundreds of planes with demand for air travel soaring in the subcontinent post-Covid.
GE Aerospace, whose Indian engineering team already plays a central role in developing its engines, including those that go on the larger, ‘wide-body’ aircraft, expects that India’s airlines will also buy more of such aircraft as international travel picks up too.
Biden administration is set to approve a potential multi-million government-to-government deal, to permit General Electric (GE) to manufacture fighter jet engines in India during PM Modi’s US visit.
Biden administration is set to approve a potential multi-million government-to-government deal, to permit General Electric (GE) to manufacture fighter jet engines in India during PM Modi’s June 21-24 US visit.
India is evaluating proposals from American and French firms for its Made in India aircraft including the LCA Mark 2 and the Advanced Medium Combat Aircraft. The evaluation of the proposals from both sides is going on. The key factors for these proposals would be the extent of the transfer of technology and pricing.