A “cumbersome” administrative structure, lack of experienced engineers, high tariffs on electronics component imports and inadequate infrastructure — these are some of the challenges that India needs to address before chip companies from the island territory start to commit serious investments, a top Taiwanese government representative said.
Responding to a question from The Indian Express on what has stopped Taiwanese chip companies from investing in India, Joseph Wu, Taiwan’s Minister of Foreign Affairs, also said the country should focus on signing a long-negotiated free trade agreement (FTA) with Taiwan that would allow companies in the semiconductor supply chain to import components, equipment and material to India easily.
“India is known to be very cumbersome in its administrative structure and it would require for the Indian government to look at that too, to streamline all kinds of laws and regulations to help semiconductor investors coming to the country,” Wu said.
“In order to get the major semiconductor production to move to India, we need to think about the whole supply chain coming together… a whole cluster, rather than just one company. If it is only one company and nobody else, that is not going to help. We need to have IC design, testing, packaging and material supply,” he said.
Taiwan Foreign Affairs Minister Joseph Wu
Taiwan is home to some of the leading names in chipmaking, including the likes of Taiwan Semiconductor Manufacturing Company (TSMC) which counts Apple and Nvidia among its clients, and United Microelectronics Corporation (UMC). More than 90 per cent of the world’s most advanced chips required for almost all electronic equipment such as smartphones, car components, data centres, fighter jets and AI technologies, are made in Taiwan.
Since the escalation in US-China tensions, a number of companies, including from Taiwan, have been looking to diversify from Beijing and consider alternate destinations for their supply chains. India, which has rolled out a $10 billion chip incentive scheme, has found some success in attracting a foundry investment from Tata and PSMC, but bigger names have stayed away so far.
In conversations with Taiwanese government officials and industry executives about India’s chip ambitions, the undertone was clear: Taiwan is looking at India as a potential investment destination, especially in the electronics space, but businesses from the island nation have some reservations which have stopped them from coming to New Delhi so far. Even in PSMC’s case, while it is offering its technology to Tata for the foundry, it has a very marginal role in the financials of putting together the plant, The Indian Express has learnt.
Advertisement
“PSMC is also moving in with a technological cooperation with Tata (to set up a foundry in India). There are other companies in Taiwan which are thinking about possibilities of setting up their operations in India, but the difficulty for the semiconductor industry to start work in a new site is that there need to be some good conditions,” Wu said.
The Indian government has created a dedicated task-force called the India Semiconductor Mission, which aims to serve as a focal point for an efficient implementation of New Delhi’s chip ambitions. All land-related clearances for the four semiconductor facilities that have been approved so far – three assembly operations that include Micron’s packaging plant and one fab – were done expeditiously, as the Centre worked with the state governments of Gujarat and Assam where these operations are being set up. The ground-breaking ceremony of the Tata-PSMC fab happened within two weeks of getting clearance.
Taiwanese chip companies have red-flagged India’s lack of adequate infrastructure needed to support the task of making semiconductors. Infrastructure is the backbone of Taiwan’s Hsinchu Science Park, which is home to TSMC, UMC and others, dotted with their suppliers for gases, water and equipped with schools, colleges, residential complexes and a thriving night-life to incentivise engineers from around the world to stay there.
“Infrastructure has to be there. This is an area that our (semiconductor) industry is not quite certain about (in terms of India) — reliable supply of water and electricity. Other than that, transportation has to be there,” Wu said. For example, in 2007, the beginning of the Taiwan High Speed Rail (THSR) enabled TSMC engineers in Hsinchu, Tainan and Taichung to go back and forth in a day to provide frequent cross-fab support.
Advertisement
Taiwan’s Deputy Minister of the National Development Council (a government planning body similar to India’s Niti Aayog), Kao Shien-Quey, said she too has received similar feedback from Taiwanese businesses, and called for the two countries to sign an FTA.
“What I’m hearing from some Taiwanese businesses who are considering investing in India, the regulations there differ from state to state and sometimes it is difficult for businesses to navigate, which does present a certain level of difficulty. The other thing that I hear is that the infrastructure could be better, I know the Indian government is doing a lot to make it better,” she told The Indian Express.
“According to my understanding, the negotiation (for the FTA) is still going on and the Taiwanese government has very strong intention to sign that agreement with the Indian government,” she said.
Foreign Minister Wu said the FTA will be crucial in attracting suppliers from Taiwan to set up operations in India. “If we are thinking about attracting a large number of hi-tech companies to India, we need to think about a very simple architecture called a free trade agreement (with Taiwan), because they need to move material, machines, goods to India and if the tax rate or tariff is very high, those are going to be impediments,” he said.
Advertisement
“So if the Indian government is serious about putting all this together, I’m sure it is going to be very attractive to the semiconductor industry to think about investing in India,” he added.
Another key challenge that India needs to address, as per Wu, is trained semiconductor engineers. While India has a big talent pool of chip designers who work at all major global semiconductor companies, it has little to show in terms of engineers who can work on chip factory floors. Wu said Taiwan and India can collaborate on that.
“In Taiwan, we have a sufficient number of engineers who are ready to work in the semiconductor industry — we not only have universities training good engineers but also dedicated semiconductor academies,” Wu said.
“In the case of India, I know there is a lot of talent, but they may not be falling in the category of experienced engineers for the semiconductor industry, and that is how Taiwan can start working with India — invite engineers from there to work in Taiwan. Right now we have 2,700 very high quality engineers from India working in Taiwan’s hi-tech companies,” he added.
Advertisement
Privately, Indian government officials also confirmed that their Taiwanese counterparts have flagged India’s lack of semiconductor engineering talent who can work on foundry floors as among the reasons that are stopping Taiwanese chip companies from coming to India.
(The reporter was in Taiwan at the invitation of the East-West Center, an educational institution founded by the US Congress.)
"chips" - Google News
April 23, 2024 at 06:30AM
https://ift.tt/Iwqgk2y
Amid India’s chip push, Taiwan flags talent gaps, high import tariff - The Indian Express
"chips" - Google News
https://ift.tt/u37HXA8
https://ift.tt/AbrtLYf
Bagikan Berita Ini
0 Response to "Amid India’s chip push, Taiwan flags talent gaps, high import tariff - The Indian Express"
Post a Comment