State of the Union: Joe Biden calls for increased focus on semiconductors, experts say will benefit India

Ritu Jha-

President Joe Biden is serious about semiconductors and their geopolitical, not just technological significance.

In his State of the Union (SOTU) address on Tuesday to the joint session of Congress, Biden began with semiconductors and how he singed the $52 billion funding for the CHIPS and Science Act last August.

Biden stated: “The small computer chips the size of your fingertip that power everything from cellphones to automobiles, and so much more. These chips were invented right here in America.”

America used to manufacture nearly 40 percent of the world’s semiconductors. “In the last few decades, we lost our edge and we’re down to producing only 10 percent.”

The realization of the importance of chip happened during the pandemic when chip factories overseas were shut down. He said, “Today’s automobiles need up to 3,000 chips each, but American automakers couldn’t make enough cars because there weren’t enough chips. Car prices went up. So did everything from refrigerators to cellphones.

“We can never let that happen again,” he asserted. “That’s why we came together to pass the bipartisan CHIPS and Science Act. We’re making sure the supply chain for America begins in America.”

Biden also stressed that bringing back manufacturing in the US, which was dependent on overseas would create jobs in the US and said, “We’ve already created 800,000 manufacturing jobs even without this law.”

India, on the other hand, also has the same slogan of “Make in India’ and hopes companies would opt for India over China given the Sino-US tensions; the latest instance being the alleged Chinese spy balloon that Biden ordered to be shot down.

Last year in April, India hosted Semicon India 2022, a conference organized by the Ministry of Electronics and Information Technology in Bangalore, a vision of PM Modi to make India a leader in electronics manufacturing, semiconductor design, manufacturing and innovation.

India Semiconductor Mission (ISM) has been set up as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to formulate and drive India’s long-term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem, the release stated.

So, will India benefit if US has the same goal? Arogyaswami Paulraj, professor emeritus, at Stanford University told indica, “While US does very well in the Fabless segment of semiconductors (NVIDIA, AMD, Qualcomm), but it’s Fab segment, once a market leader, has weakened both in technology and market share. US Govt. is finding ways to help the industry. I am sure that will help.”

“US-India S&T (United States–India Science & Technology) partnership has a long history and involved both government and non-government initiatives like US-India S&T Joint Commission and Indo-US S&T Forum. These forums have been effective in easing US-imposed export controls to India in critical technologies including nuclear.”

Less tangibly, they have also fostered a closer relationship between Indian and US S&T institutions. The more recent ICET (U.S.-India Initiative on Critical and Emerging Technologies) meeting held in Washington was also aimed at making these S&T partnerships more effective.

Prof. Paulraj added, “A timely question is – what is India’s most critical technology gap today? I believe it is the Semiconductor Industry. Not R&D, but a commercially competitive design and manufacturing capability. Semiconductors touch almost every aspect of Indian economy – from smartphones to automobiles, from banking and to medical instrumentation. They are also at the core of India’s defense and national security capability. Despite this criticality, India is 100% dependent on imports. Therefore, an effective US-India partnership that truly helps India address this crucial vulnerability will be enormous. No doubt the US semiconductor industry is in the private sector with the usual commercial drivers. But we can good ideas to motivate US firms to partner with Indian private sector to build a credible semiconductor capability in India.”

Responding to indica on will it hamper India, when Biden has a vision of making America a manufacturing hub and during his speech from the Capitol building, he said, “To rebuild the backbone of America, the middle class…to unite the country. We’ve been sent here to finish the job. For decades, the middle class was hollowed out. Too many good-paying manufacturing jobs moved overseas. Factories at home closed down. Once-thriving cities and towns became shadows of what they used to be.”

Semiconductor technology began with the invention of the transistor at the Bell Labs in 1947. The industry was first seeded in the Silicon Valley in the 1970s, with Fairchild Semiconductor and Intel being the major pioneers. The industry is now spread across the globe, with the US, China, Taiwan, South Korea, and Japan emerging as the primary participants.

Vivek Wadhwa, an academic, entrepreneur, and author of the book, ‘From Incremental to Exponential’, explains how large companies can see the future and rethink innovation told indica, “To have an America which is stronger and not dependent on China will not hurt India, it will only help India. As well, many of the components will be outsourced to India and the US will help India with its manufacturing. Already Apple is looking to move more and more of its manufacturing to India, this will accelerate.”

He said that just as India built a $200 billion industry by building on top of existing semiconductor technologies, it can partner with the United States to build on top of the newer technologies that it creates. And it can build its own semiconductor technologies that are complementary.

“On January 30, USIBC helped launch business-government collaboration through the new U.S.-India initiative on Critical and Emerging Technology. It’s clear that both governments are committed to aligning their strategies on semiconductors, and our companies hope to be constructive partners in this effort,” Ambassador Atul Keshap, USIBC President echoed the above, told indica. “On chips, American companies are interested in opportunities to further integrate India into semiconductor value chains—including critical need areas such as packaging, testing, and assembly.”

Commenting on Biden’s speech, Dr. Thomas Abraham, Chairman, Global Organization of People of Indian Origin (GOPIO) told indica, “President Biden gave an excellent speech at the State of the Union Address. His plans to make America a manufacturing hub is long overdue. Using new technologies including artificial intelligence is achievable for high value-added components and products.”

Adding on Abraham sharing his thoughts about Biden’s focus on semiconductors said as the US is investing in semiconductor manufacturing, at same India has also taken initiative in that direction, and increased cooperation between the two countries will benefit both countries. However, there was nothing on the immigration issue of skilled tech people. He made overtures on bipartisan to resolve some of the legislative issues pending in the Congress.  Overall, his plans are in the right direction for the country.

Related posts