India, Japan to partner in semiconductor manufacturing, design, talent development

India and Japan sign MoU

India and Japan have signed a memorandum of understanding (MoU) to establish a joint mechanism that will oversee collaboration between the two governments and industry in two countries in semiconductors, Union Minister Ashwini Vaishnaw said on July 20.

"The MoU is on five fronts, viz. semiconductor design, manufacturing, equipment research, talent development, and bringing resilience to the semiconductor supply chain," said Vaishnaw.

"The two countries will establish an implementation organisation to decide on collaboration on government-to-government and industry-to-industry fronts," he added.

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The minister said that the agreement with Japan is the latest example of the increasing trust in India and an extension of the success of PM Modi's recent visit to the United States.

The development comes a day after it was learned that the HCL Group is contemplating setting foot in India's expanding semiconductor space.

The pact with Japan comes at a time when India is trying to attract major semiconductor players to set up chip fabrication and assembling plants in the country with a $10 billion subsidy programme.

During Modi's visit to the US, semiconductor major Micron committed to set up a $2.7 billion assembling plant in the country. According to estimates, the Centre and state government of Gujarat will cumulatively bear 70 percent of the cost of the project in the form of subsidies.

Meanwhile, semiconductor equipment maker Applied Materials has said it would invest $400 million to design chipmaking machinery in the country.

However, the government has yet been unable to attract any major foreign foundry to the country at a time when advanced economies like the US, Germany, the European Union and Japan have announced large subsidy programmes in a global race to corner the semiconductor pie.