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OPINION NOVEMBER 03, 2023 | The Indian Eye 11

edge a national imperative. India’s capabilities in large-
The Trump administration pur- scale semiconductor manufacturing
sued an aggressive policy of trade are almost non-existent. India had
war and sanctions against China announced semiconductor policies
which the current Biden administra- on two previous occasions—in 2007
tion has moderated, and is working and then in 2013. The governmen-
to identify areas of cooperation. This tal initiatives failed for a variety of
notwithstanding, the US is deter- reasons. In 2007, it was felt that the
mined to limit flow of technology to government delayed the passage of
China—notably semiconductors— the semiconductor policy and the fi-
and invest in technology innovation nancial initiatives provided were also
at home. In August 2022, President considered inadequate. The govern-
Biden signed the CHIPS and Science ment’s efforts in 2013–14 also failed
Act, an Executive Order on Advanc- to make a dent in India’s semicon-
ing Biotechnology and Biomanufac- ductor manufacturing ecosystem.
turing Innovation, and the Inflation In March 2022, the government
Reduction Act. The CHIPS Act aims announced India Semiconductor
to invest US$ 52 billion to restore US Mission (ISM) with a vision to build
leadership in semiconductor man- India’s capabilities in large-scale semiconductor manufacturing are almost non-existent. a vibrant semiconductor and display
ufacturing and R&D and reduce India had announced semiconductor policies on two previous occasions design and innovation ecosystem to
over-reliance on foreign-produced —in 2007 and then in 2013 (File photo) enable India’s emergence as a glob-
chips. al hub for electronics manufacturing
The export controls policy on AI and design. A total outlay of INR
and semiconductor technologies to nese government announced that it To frustrate US led effort to de- 76,000 crore has been announced
China announced by the US on 7 Oc- aims to raise about 300 billion yuan couple the country from advanced for the development of semicon-
tober 2022 was a “major diplomatic (US$ 41 billion). chip technology, China is directing its ductor and display manufacturing in
gamble”. These export controls were resources and efforts towards manu- the country. The programme aims
designed after consultation with key Over the last decade, huge facturing cutting-edge processors as to provide financial support to com-
US allies, but the US originally im- also attempting to become competi- panies investing in semiconductors,
plemented them unilaterally. In late sums of money have flowed tive in legacy chip manufacturing. In display manufacturing and design
January 2023, the US, Japan and the into the semiconductor indus- August 2023, when US Commerce ecosystem. ISM has been set up as an
Netherlands reached a landmark Secretary Gina Raimondo was vis- Independent Business Division with-
agreement on semiconductor tech- try with little oversight lead- iting the country, Huawei released in Digital India Corporation (DIC).
nology export controls to China. ing to corruption. In 2021 Mate 60 Pro, a phone featuring an Yet, for all the good intentions as-
The semiconductor industry is unexpectedly advanced processor. sociated with ISM, it should avoid the
one of the world’s most globalized and 2022, China undertook The processor was made on a 7-nano- pitfalls of the past which were a drag
industries. A factor which has con- an anti-corruption drive in its meter process node, a capability that on India becoming a manufacturing
tributed to globalization of this in- US export controls seek to deny. hub. Robust inter-ministerial coordi-
dustry has been the unification of the semiconductor funds, punish- It is quite likely that the chip nation and provisioning of necessary
mobile communication standards. ing individuals for graft and designing for Mate 60 Pro has been facilities including infrastructure and
This has led to the development of done in-house by Huawei’s Hisilicon, funds is essential for seamless policy
the globalized supply chain, of which wasteful spending. The Cen- which can design advanced chips, implementation. India is home to 20
China is an important player. Inte- tral Commission for Discipline especially for smartphones. Howev- per cent of the global workforce that
grated circuit chips are indispensable er, the fabrication of the chip, in all designs chips. But foreign firms own
to mobile communication devices. Inspection (CCDI), the CCP’s possibility, has been undertaken by the intellectual property underlying
Globalized supply chain of popular anti-graft agency, has probed SIMIC using US equipment without the chip designs. In case of chip man-
iPhone abundantly demonstrates the such a license. It has also been report- ufacturing, India’s policy will require
challenges the US and its Western several senior officials and for- ed that several Taiwanese technology applicants to own production-grade,
partners will face to decouple from mer officials at SINO-IC Cap- companies are helping Huawei Tech- licensed technologies. Proper train-
China. The chips used in the phone nologies Co. build infrastructure for ing of talent or the workforce is
are designed in the US, produced in ital, the sole manager for the an under-the-radar network of chip also essential. India also needs to
Taiwan, packaged in Southeast Asian ‘Big Fund’. plants across southern China. address infrastructure concerns,
countries, and assembled with oth- The term ‘legacy chip’ is a mis- especially the availability of land.
er components from Japan, South nomer. It refers to semiconductor
Korea, Europe and China to form a Despite ongoing anti-graft inves- produced on older process nodes Rajneesh Singh is Research Fellow at
complete phone. tigation, SINO-IC Capital is expect- with less dense circuitry. Except in the Manohar Parrikar Institute for De-
China has been investing huge ed to remain one of the managers the most advanced computer proces- fense Studies and Analyses, New Delhi
sums of money to further its semi- for the third fund, a sign of both des- sors, these chips are used in highly Views expressed are of the author and
conductor ambitions. The China In- peration and importance attached to advanced applications, such as state- do not necessarily reflect the views of
tegrated Circuit Industry Investment semiconductor industry by the Chi- of-the-art microwave integrated cir- the Manohar Parrikar IDSA or of the
Fund, also known as the ‘Big Fund’, nese decision-makers. The despera- cuits and electric vehicles. Chinese Government of India.
has launched three funds till date. tion arises from the fact that despite dominance in legacy chip ecosystem
The first two funds were launched some successes, like the Semicon- will provide the country with levers The full version of this article first
in 2014 and 2019, which according ductor Manufacturing International wherein it can exercise control over appeared in the Comments section of
to government reports, raised 138.7 Corporation (SMIC), ‘Big Fund’ in- essential services such as energy in- the website (www.idsa.in) of Manohar
billion yuan (US$ 19 billion) and 200 vestments have failed to meaningful- frastructure, automotive industry, Parrikar Institute for Defense Studies
billion yuan (US$ 27 billion) respec- ly reduce China’s reliance on import- emergency response systems to even and Analyses, New Delhi on October
tively. In September 2023, the Chi- ed technology. everyday consumer electronics. 24, 2023

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