US Partnering With India On Semiconductor Supply Chain

The United States and India are working together to solve the global semiconductor chip shortage thanks to a partnership unveiled by both countries on Monday.

According to a statement from the U.S. Department of State, India's Semiconductor Mission, Ministry of Electronics and IT will cooperate with the U.S. under the International Technology Security and Innovation (ITSI) fund, part of the CHIPS Act, to manufacture semiconductor chips for the benefit of both nations.

"The United States and India are key partners in ensuring the global semiconductor supply chain keeps pace with the global digital transformation currently underway," the release said. "Manufacturing of essential products ranging from vehicles to medical devices relies on the strength and resilience of the semiconductor supply chain."

The partnership's first phase involves assessing India's current semiconductor production capabilities and other factors, such as workforce capacity and the infrastructure required to produce the chips. Both nations are encouraged by New Delhi's potential to expand its semiconductor industry.

"Our cooperation underscores the potential to expand the Indian semiconductor industry to benefit both nations and much of the rest of the world," said US Deputy Assistant Secretary of State for Trade Policy and Negotiations J Robert Garverick. "Our global partnership will extend to supply chain logistics."

The U.S. passed the CHIPS Act in 2022, which included the creation of the ITSI, a $500 million fund ($100 million over five years starting in 2023) that addresses the supply to meet the growing demand of semiconductor chips. The ITSI fund will be used to get the deal with India off the ground.