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India, Taiwan Mega Deal to Set Up $7.5 bn Chip Manufacturing Plant | Semiconductor | The Dawn
n order to address the global semiconductor chip shortage issue, India is in talks with Taiwan. According to an exclusive report by Bloomberg, this could bring chip manufacturing to South Asia along with tariff reductions on components for producing semiconductors by the end of the year. The officials in New Delhi and Taipei have met in recent weeks to discuss a deal that would bring a chip plant worth an estimated $7.5 billion to India to supply everything from 5G devices to electric cars. World leaders and executives at multinational corporations have been worried about the global scarcity of semiconductors, which has hit manufacturing and sales in numerous countries and no early solution is in sight.
Semiconductors, or chips, have properties that are somewhere between conductors and insulators. Usually made of silicon, they are used to power a wide range of devices - cars, laptops, smartphones, household appliances and gaming consoles.
These tiny objects perform a host of functions such as powering displays and transferring data. So, a supply crunch has a consequent impact on sales of cars, fridges, laptops, TVs and other electronic devices. Manufacturing cannot be increased on short notice. As a Bloomberg report points out, making chips is a complex process that takes months. Taiwan Semiconductor Manufacturing Corporation (TSMC) is the world’s largest contract chipmaker, whose customers include Qualcomm, Nivdia and Apple. It holds 56 percent of the foundry business of manufacturing chips. The surge in sales for electronic devices during the pandemic created a huge demand for semiconductors. But COVID-19 is not the only factor behind the shortage. The tense relationship between the United States and China is also a factor, since many US companies do business with Chinese companies. For instance, Huawei, which supplied to American chip makers, has been blacklisted by the US government.
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