Taiwan And India Plan Smooth Partnership For Chip Manufacturing
Taiwan and India have discussed strengthening their strategic partnership in the field of semiconductor fabrication for some time now. Taiwan is a global leader in chip making, while India is looking to enter this domain late. However, translating this alignment into action on the ground has faced some obstacles.
One Taiwanese company has stepped forward – Powerchip Semiconductor Manufacturing Corporation (PSMC), a mid-sized chipmaker based in Hsinchu, Taiwan known for producing legacy logic and memory chips. It has partnered with India’s Tata Electronics Pvt Ltd (TEPL) to set up a manufacturing facility, but the model being tried is different than Taiwan Semiconductor Manufacturing Company’s (TSMC) investments overseas.
PSMC will provide technological expertise through licensing instead of direct equity investment. This likely aims to limit financial exposure as PSMC is smaller than giants like TSMC. Some question if this model can succeed without direct funding and supplier partnerships to develop the local ecosystem rapidly.
TSMC’s new facilities abroad have seen massive equity investments and involvement of over 25 Taiwanese supplier companies to build the required infrastructure and supply chains. It has also rigorously trained large numbers of local workers. Comparatively, the sole responsibility of establishing India’s chip manufacturing ecosystem now rests with TEPL, which lacks experience in this specialized field.
Several Taiwanese industry executives point to multiple concerns holding back bigger players like TSMC and UMC from investing directly in India so far. These include lack of necessary ancillaries, technical skills gaps, unpredictable trade policies and connectivity issues between manufacturing clusters.
They cite the example of Foxconn’s failed joint venture which was touted as India’s first chip plant. If even a major Taiwanese investor like Foxconn could not convince officials, others will find it tougher. Both sides are working to address challenges through ongoing discussions.
The government remains committed to developing semiconductor manufacturing capabilities and attracting global partners, stressing India’s talent pool. As discussions progress smoothly between Taiwan and India, more clarity and partnerships can emerge to fulfill both nations’ chip dreams.
