India asks Taiwan to include wafer fab in trade deal

September 27, 2021 // By Peter Clarke
India asks Taiwan to include wafer fab in trade deal
India and Taiwan have held discussions on a trade deal that could bring wafer fab with a projected cost of $7.5 billion to India, according to a Bloomberg report.

The talks between New Delhi and Taipei were held in recent weeks and would accompany tariff reductions on equipment for producing semiconductors to be in place by the end of the year, the report said referencing unnamed sources. The plant would be configured to produce chips for 5G cellular communications and electric vehicles, the report said.

The political discussions on Indian chip production come at a time when long-standing plans to create an analog wafer fab in Gujurat seem to have stalled (see Indian analog wafer fab plan stuck in neutral ). Meanwhile India is studying locations that have enough suitable workers and wafer saying it will provide 50 percent of the capital expenditure plus tax breaks and other incentives for the firm that operates the wafer fab.

In the last few days the leaders of the United States, Australia, Japan and India announced a pact for "creating a safe supply chain for semiconductors. That move was seen, in part, as countering rising Chinese influence in technology and reducing the concentration of advanced chip production in southeast Asia (see Report: US, Japan, India, Australia to heap chip pressure on China ).

Taiwan's negotiators have flagged up concerns over the reliability of the wafer and electricity supply and suggested that India should consider building up its fabless chip design sector before moving on to the building of wafer fabs, the report said. However, officials in Taiwan also want to make quick progress on bilateral investment agreement as a precursor to a broader trade deal also under consideration. A commitment to help build a wafer fab could be an easy and early sign of progress.

The People's Republic of China considers Taiwan to be a renegade state within the country of China that it would have the right to occupy, at a time of its own choosing and using force if necessary.

Related links and articles:

Bloomberg report

News articles:

Indian analog


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