Eyeing future investments from Taiwanese chip giants, the Indian government has reportedly assured Taiwan of policy stability ahead of a milestone in India’s semiconductor sector.
The central government has recently assured Taiwanese businesses and officials of policy stability to address Taiwanese concerns about India’s semiconductor ambitions.
According to a report by the Indian Express, senior IT Ministry officials have met with industry leaders and government representatives in Taipei, emphasising that there will be no sudden changes to import regulations or customs duties affecting semiconductor materials.
This reassurance comes as Tata Electronics prepares to launch India’s first commercial semiconductor fab in Dholera, Gujarat. The fab will benefit from technology support provided by Taiwanese chipmaker Powerchip Semiconductor Manufacturing Corporation (PSMC). However, PSMC’s involvement is limited to technology collaboration and does not include an equity stake.
The central government anticipates ongoing engagement with Taiwanese chip firms, and officials may lead to more significant future investments. This could include Taiwanese companies taking equity stakes in joint ventures with Indian firms or establishing independent operations in India.
It was previously reported that PSMC’s cautious approach stems from key players preferring to avoid risks. Being a smaller company, PSMC has opted for a model that avoids financial investment, leaving uncertainty about its future development.
Indian Express further reported that New Delhi’s outreach to Taiwanese officials is driven by Taiwan’s strategic importance in chipmaking.
Taiwan is home to major players like Taiwan Semiconductor Manufacturing Company (TSMC), which serves clients such as Apple and Nvidia, and United Microelectronics Corporation (UMC). Taiwan produces over 90% of the world’s most advanced chips in smartphones, automotive components, data centres, fighter jets, and AI technologies.
Chips are made of tiny circuits on silicon wafers, with semiconductor fabs using a complex, multi-step process in cleanrooms, requiring silicon wafers, chemicals, and stable power and water supplies.
India’s semiconductor incentive plans aim to enhance packaging, assembly, testing facilities (ATMP and OSAT units), and full-scale chip foundries. However, from a Taiwanese viewpoint, significant policy support gaps hinder substantial investments from Taiwanese firms in India.
Taiwan’s Foreign Minister, Joseph Wu, had addressed India’s cumbersome administrative structure, lack of experienced engineers, and high tariffs on electronics components as barriers to Taiwanese chip companies investing in India before.
He stressed that India needs to streamline regulations and build a complete semiconductor ecosystem rather than depend on individual companies. Meanwhile, Indian IT officials believe India has the expertise to lead globally and anticipate more foreign investment.
Taiwan’s Deputy Minister Kao Shien-Quey noted in July that there was significant potential for collaboration between New Delhi and Taipei in emerging technologies.
Taiwanese tech giants are eyeing India to bolster their global supply chains. However, this interest has not yet resulted in concrete investment commitments as of now.
