As India ramps up efforts to develop a strong semiconductor manufacturing ecosystem locally, Taiwan – the global leader in chip making – has highlighted certain challenges the country needs to address. In a meeting with senior government officials from Taiwan, industry representatives from the island nation pointed to issues like complex administrative processes, lack of experienced engineering talent and high import duties that could act as roadblocks for major investments in the sector.
More than 90% of the world's most advanced semiconductors are manufactured in Taiwan by companies like TSMC and UMC. With geopolitical tensions altering global supply chains, many firms are exploring alternate investment destinations. India has introduced incentives worth $10 billion to attract chipmakers. While some success has been seen with investments from Tata and PSMC, larger players are still on the sidelines.
During interactions, Taiwan officials said while looking at India as a potential market, streamlining regulatory hurdles would be key. The country's processes are seen as intricate, requiring simplification. High tariffs were also flagged as a deterrent as chipmaking relies on easy flow of material and machinery. Addressing these could make India more attractive, according to Joseph Wu, Taiwan's Foreign Minister.
Ensuring adequate infrastructure and availability of experienced engineers were other concerns raised. Taiwan has built robust infrastructure around its semiconductor hub to incentivize talent. However, India reportedly lacks such facilities and semiconductor-specific engineering resources, beyond chip designers.
Collaborating to train Indian engineers in Taiwan was suggested as one way to tackle this bottleneck. The two sides also stressed on the need for a long-awaited bilateral trade agreement to allow freer movement of components crucial for the sector.
As New Delhi aims to lure bigger manufacturers, it will need to factor in these prerequisites identified by key players in the global semiconductor supply chain and long-time industry leaders in Taiwan. With focused efforts, India hopes to integrate into global value chains and emerge as a key player in the strategic industry.
