India-Singapore Agreement on Semiconductor Partnership

India-Singapore Semiconductor Pact

• Semiconductor Significance: Semiconductors are essential components in products like missiles, mobile phones, cars, and computers.
• Global Supply Disruptions: The COVID-19 pandemic and tensions in the Taiwan Strait have pushed India to develop its semiconductor industry.
• India’s Semiconductor Push:
  • Launched the India Semiconductor Mission in 2021 with a Rs 76,000 crore chip incentive scheme.
  • Government offers 50% of capital expenditure costs as subsidies for semiconductor plants.
  • The government approved five semiconductor units in 2023 under this scheme, including partnerships like the one between Tata Group and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC).

Singapore’s Semiconductor Industry

• History: Singapore’s semiconductor industry developed early due to the vision of its first Prime Minister Lee Kuan Yew.
• Major Players in Singapore: Nine of the world’s top 15 semiconductor companies have operations in Singapore, which plays a key role in IC design, assembly, packaging, testing, and wafer fabrication.

Key Factors Behind Singapore’s Semiconductor Success

• Favourable Business Conditions: Stable governance, advanced infrastructure and presence of leading companies across the entire semiconductor value chain have made it an attractive destination for investment.
• Educational Partnerships: Universities in Singapore offer specialised courses in microelectronics and IC design and collaborate with companies on semiconductor research.
• Wafer Fabrication Parks: The country’s semiconductor facilities are located in four specialised wafer fabrication parks, where the government provides customised infrastructure to support industry needs.

India’s Opportunities for Collaboration with Singapore

• Talent Development: India can collaborate with Singapore in semiconductor education and training leveraging its experience in talent-building programs.
• Industrial Parks: Singapore’s expertise in managing Wafer Fab Parks can be shared with India as it seeks to develop its own semiconductor industrial hubs.
• Expansion Opportunities for Singapore: India’s abundant land and competitive labour costs make it an attractive destination for semiconductor companies from Singapore looking to expand.
• Equipment and Material Collaboration: India can engage with Singapore to develop semiconductor equipment and material manufacturing to support its own ecosystem.

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