How the US CHIPS Act will Aid India in Achieving Self-sufficiency in Semiconductor Industry

By siliconindia   |   Saturday, 13 August 2022, 00:26 IST
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How the US CHIPS Act will Aid India in Achieving Self-sufficiency in Semiconductor Industry

According to Indian analysts, this action will complement Indian efforts in this area and further strengthen the Semiconductor India Programme as India prepares to become self-sufficient in semiconductor chips.

A USD 280 billion bipartisan bill to increase domestic high-tech manufacturing was signed by US President Joe Biden as part of his administration's effort. According to experts, as India works to become self-sufficient in semiconductor chips, this move will complement Indian efforts in this area and strengthen the Semiconductor India Program.

K Krishna Moorthy, CEO and president of the India Electronics and Semiconductor Association (IESA), said a closer reading of the US CHIPS Act shows that there is a greater thrust on research and investment in STEM (science, technology, engineering, and mathematics) education. According to Moorthy, the Act highlights key components of India's semiconductor push and encompasses a wide range of initiatives that require support.

If one looks at India's policy, they will notice the following components: Design-related incentive for developing the design ecosystem; Significant personnel development or skilling effort that has been budgeted in addition to the subsidies that are being granted under the policy. The shortage of semiconductors has already begun to ease. Many products have returned to their previous lead times of 4 to 8 weeks, but some sections still have lengthy lead times, which is concerning.

The US regulation will benefit India. Numerous nations contribute to the global nature of the semiconductor supply chain. India offers some of the best incentives in the world when looking at incentives from both a federal and state standpoint. As a result, the incentives offered by India will complement US efforts.

The legislation, a key component of Joe Biden's economic agenda that will encourage investments in the American semiconductor industry in an effort to reduce the US's reliance on foreign supply chains for essential, cutting-edge goods, was celebrated by the vice president in the presence of numerous lawmakers, union officials, local politicians, and business leaders.

In reference to the tiny electronic components that power everything from cell phones to computers to autos, Biden declared that the future of the chip industry is going to be created in America. The law specifically allocates USD 52 billion to support the US computer chip industry. After more than a year of work, the bill was eventually passed by large bipartisan majorities in both chambers of Congress late last month.

 Even though party leaders started urging their members to vote against it after Democrats advanced a separate comprehensive bill focusing on climate and health care, the House swiftly followed suit with a 243-187 vote that included 24 House Republicans in favour. The Senate passed it by a vote of 64-33, with 17 GOP senators supporting it.