Ahead of Semicon India 2024, scheduled from September 11-13, 2024 in New Delhi, Manharsinh Laxmanbhai Yadav, Director General of the India Taipei Association, spoke with DIGITIMES Asia about why now is the prime time for Taiwanese companies to invest in India.
He emphasized that Taiwan should capitalize on the momentum of the five ongoing semiconductor projects in India, warning that the substantial incentives supporting these plants offered by the Indian government may not be available for long.
With around US$25 billion already committed to semiconductor fabrication and packaging, Yadav called for more Taiwanese participation, stressing the untapped potential.
"We have 650 booths this year, with 250 semiconductor companies attending, showing global interest in India's semiconductor sector," he said. However, only four Taiwanese companies have confirmed their participation. Yadav sees this as a missed opportunity, noting, "Taiwan has a great story in semiconductors, and this is an opportunity for them to further expand their market."
Approved semiconductor projects in India | |||
Company and Partner | location | Project | Investment |
Tata Electronics & PSMC (Taiwan) | Dholera, Gujarat | Wafer Fab | US$11 billion |
Tata Electronics | Jagiroad, Assam | OSAT | US$3.25 billion |
CG Power & Renesas (Japan) & Star Microelectronics (Thailand) | Sanand, Gujarat | OSAT | US$917 million |
Micron (US) | Sanand, Gujarat | OSAT | US$2.75 billion |
Kaynes Semicon | Sanand, Gujarat | OSAT | US$400 million |
Source: ITA, compiled by DIGITIMES Asia
Message to Taiwanese firms
India's largest semiconductor project, a US$11 billion wafer fabrication plant—a collaboration between Tata and Taiwan's PSMC—marks the country's first commercial fab. Yadav praised the venture as a strong start for Taiwan-India partnerships. Additionally, with over US$15 billion invested in semiconductor packaging, he believes India is rapidly becoming a hub in this sector.
Yadav pointed out that Taiwanese companies, beyond major players like Foxconn and PSMC, are showing increasing interest in the market. He mentioned that advanced discussions are underway for memory and display fabs, as well as a potential foundry to set up operations in India. Though he refrained from naming specific companies, Yadav was optimistic about the materialization of these partnerships soon.
Central to his message was the urgency for Taiwanese firms to take advantage of India's semiconductor subsidies.
"We have implemented two rounds of incentives, offering up to 70% in capital subsidies for investments," he explained. However, he warned that these subsidies might not be available indefinitely, urging companies to move quickly.
"There should be a FOMO (fear of missing out) among Taiwanese firms—if they don't invest soon, they could miss the opportunity. After US$25-30 billion in investments, subsidies may no longer be available," says the Director General.
Opportunities for Taiwanese firms
Yadav outlined key areas where Taiwanese companies could benefit. "The fab project will require a significant supply chain, and there is a huge opportunity for Taiwanese suppliers to become part of that ecosystem," he explained. He further stressed that Taiwan could capitalize on the groundwork laid by the first fab, easing the entry for future ventures.
Taiwan's expertise in semiconductor packaging also aligns with India's growing market. Micron Technology and Tata, along with several other major firms, are already developing advanced packaging facilities. "The packaging industry is coming up quickly, and Taiwanese companies should consider India for their advanced packaging needs," Yadav said.
Yadav believes India's potential in AI development is another avenue for Taiwanese firms to explore, especially as Indian startups push into AI chip design. "This is the right time for Taiwanese companies to move into the AI space in India," Yadav said.
Tapping into Indian talent
Yadav also highlighted India's rich pool of engineering talent, noting that 20% of the world's design talent is Indian. He emphasized that more than a hundred Indian universities now offer semiconductor-related courses, and partnerships with Taiwanese universities are helping cultivate the next generation of engineers.
These efforts, he said, will not only bolster India's semiconductor industry but also support the global ecosystem. "We're producing tens of thousands of semiconductor engineers annually," Yadav stated, adding that major Taiwanese companies like MediaTek and TSMC are already hiring in India.
He encouraged more Taiwanese firms to follow suit, citing a recent conversation with SEMI President Ajit Manocha, where he assured that any skills shortage in the semiconductor sector could be addressed by tapping into India's talent pool.
International collaboration
Yadav underscored India's comprehensive approach to international semiconductor partnerships, positioning the country as both a collaborator and provider.
"We view these relationships as a two-way street," he noted, pointing to strategic collaborations with Taiwan, the US, Japan, and other key players. India aims to co-develop the semiconductor industry while supplying its partners with the resources they need, whether in terms of talent or technology.
"Trust is key in the supply chain, and building that trust through collaboration is critical, especially among democratic nations."
When discussing Taiwan's potential role in India's semiconductor ecosystem, Yadav highlighted the natural synergy between the two countries. "Taiwan is one of our most trusted and preferred partners," he said, stressing the complementary strengths in hardware and software. Taiwan leads in fabrication, packaging, and testing, while India has its strengths in software, design, and talent development.
"Both countries together can create a strong value chain across the entire semiconductor spectrum," he added, suggesting that this partnership can play a transformative role in the global semiconductor landscape.
Commercial and energy sustainability
Yadav addressed the commercial sustainability of semiconductor plants, citing India's strategic geographic location and strong international business relationships. "India is close to major markets like the Middle East, Africa, and Eastern Europe, and we have robust ties with the US," he said.
He assured potential investors that India's government is committed to making all semiconductor projects commercially viable and sustainable.
In addition, Yadav emphasized India's strong commitment to sustainable energy, particularly for semiconductor manufacturing, which is highly energy-intensive. He pointed out that by 2030, India aims to generate 500 gigawatts of renewable energy, ensuring a reliable supply of clean power for semiconductor plants.
"India is uniquely positioned to offer almost unlimited renewable energy to semiconductor companies," Yadav said, highlighting specific initiatives such as the Dholera project.
This region will benefit from a mix of energy sources, including a nearby solar energy park, a nuclear power station, and conventional power plants.
"Electricity supply will not be an issue, and renewable energy is a major advantage for companies setting up in India," he assured.
Additionally, he pointed out that India is continuously expanding its nuclear energy capabilities, commissioning one reactor per year for the foreseeable future.
The Dholera Special Investment Region (DSIR), in particular, offers a strategic advantage for semiconductor investors. "Dholera has vast land availability and excellent connectivity with international airports and high-speed rail," Yadav noted. He added that the region is already home to packaging and testing operations, making it an ideal location for a fully integrated semiconductor hub.
"With companies like Foxconn and Pegatron already there, it makes sense for fabs to be located in the same area, ensuring that everything from packaging to final assembly can be done in one place."
The timing is now
Yadav concluded by emphasizing India's large and growing domestic market. "India's economy, now close to US$4 trillion, has already outpaced ASEAN. With a unified taxation system and free trade zones, any company that establishes itself in India can access this vast market," he said.
In closing, Yadav expressed optimism about the future of India's semiconductor industry, particularly as it continues to build its supply chain ecosystem. He reassured potential investors about India's stability and commitment to its international partnerships.
"The time is now for Taiwanese companies to invest in India's semiconductor industry. The infrastructure is ready, the talent is there, and the incentives won't last forever," he urged, highlighting India's readiness to become a global semiconductor hub.
