India and Japan join hands to boost semiconductor supply chain amid global shortage

India and Japan join hands to boost semiconductor supply chain

New Delhi: In a significant move to enhance the resilience and security of the semiconductor supply chain, India and Japan have signed a Memorandum of Cooperation (MOC) on the Japan-India Semiconductor Supply Chain Partnership. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the MOC on Wednesday, which was signed between the Ministry of Electronics and Information Technology and the Ministry of Economy, Trade and Industry of Japan in July.

The MOC aims to strengthen the collaboration between the two countries in the field of semiconductors, which are vital for the development of industries and digital technologies. Semiconductors are the key components of electronic devices such as computers, smartphones, and automobiles. However, the global demand for semiconductors has outstripped the supply, leading to a severe shortage that has affected various sectors.

The MOC will facilitate both government-to-government (G2G) and business-to-business (B2B) cooperation on opportunities to advance a resilient semiconductor supply chain and leverage complementary strengths. Japan is one of the world’s leading producers of semiconductors, with about 100 manufacturing plants and a strong research and development base. India, on the other hand, has a huge market potential and a growing talent pool in the field of electronics and information technology.

India and Japan join hands to boost semiconductor supply chain

The MOC is expected to boost the bilateral partnership between India and Japan in the digital domain, which was launched as the India-Japan Digital Partnership (IJDP) in October 2018 during Prime Minister Modi’s visit to Japan. The IJDP covers various areas of cooperation such as digital infrastructure, cybersecurity, e-governance, skill development, innovation, and start-ups. Japan is the second ‘Quad partner’ after the US to sign an agreement with India for the joint development of a semiconductor ecosystem. The Quad is an informal strategic grouping of four democracies – India, US, Japan, and Australia – that aims to ensure a free and open Indo-Pacific region.