India is also seen to have a geopolitical advantage amid a simmering US-China chip war over semiconductor intellectual property and advanced manufacturing technologies.
During Mr Modi’s visit to the US from Sept 21 to 23, the US announced a partnership with India to build the first semiconductor fabrication plant focused on defence and other national security applications.
Mr Ajit Manocha, president of US-based association Semiconductor Equipment and Materials International, noted that India’s semiconductor plans had global ramifications.
“If you have more hubs, then you can de-risk some of the calamities… One hub gets fever or flu, the whole world gets sick,” said Mr Manocha, adding: “The world is looking into what are the other countries where we can grow the hubs so we don’t run into the same problem we ran into when we had chip shortages.”
Asian countries such as Vietnam and Malaysia are also vying to become semiconductor hubs.
Mr Manocha noted that India as a democracy and a big market ticked many of the boxes.
“I think the stars are aligned in favour of India. The policies are right, the vision is right and geopolitical tensions are such that India is considered as a preferred country to work with,” he added.
Under India’s MOU with Singapore, Enterprise Singapore (EnterpriseSG) and India Semiconductor Mission are helming a business-to-business Cooperation Forum to help foster private-sector partnerships between Indian and Singapore firms.
The Republic accounts for 10 per cent of all chips produced worldwide, and about 20 per cent of global semiconductor manufacturing equipment production.
Mr Karthik Nachiappan, a fellow at the Institute of South Asian Studies at the National University of Singapore, said: “Singapore offers expertise, experience and capital. And India offers scale and growth. These are natural synergies.
“And investing in India’s chip-making capacity can provide new sources of growth for Singaporean firms keen to expand. There’s no dearth of space in India to establish fabs.”
EnterpriseSG took eight Singapore firms to India in August to meet Indian stakeholders and understand the Indian ecosystem. This was followed by 22 firms, including Cleantech, in September to showcase their products and solutions at Semicon India 2024, a semiconductor conference and trade show which saw 250 participating companies from India and overseas.
