Japan-India Semiconductor Supply Chain Partnership


Recently, the Union Cabinet sanctioned a Memorandum of Cooperation (MoC) between India and Japan concerning the Japan-India Semiconductor Supply Chain Partnership.


GS-03 (Science and technology)

Main Highlights:

  • The MoC, signed in July 2023, aligns the Ministry of Electronics and Information Technology in India with Japan’s Ministry of Economy, Trade and Industry.
  • This agreement primarily aims to strengthen collaboration between the two nations to bolster the semiconductor supply chain.
  • This MoC remains valid for a duration of five years from the date of its signing.
  • An integral part of the Indian government’s strategy is to foster an environment conducive to electronics manufacturing within the country.
  • The Ministry actively endorses international collaboration in emerging Information Technology realms, participating in bilateral and regional frameworks.

What are semiconductor chips?

  • Semiconductors are materials with a conductivity between conductors and insulators.
  • They can be pure elements like silicon or compounds like gallium arsenide.
  • Semiconductor chips are the basic building blocks of modern electronics and information technology products.
  • They are essential components in automobiles, household gadgets, and medical devices.
  • The COVID-19 pandemic has increased the demand for semiconductor chips as more activities shift online.
  • Shortages of semiconductor chips have caused disruptions in various industries, leading to pent-up demand and subsequent supply shortages.

qaclk ImageS 17>487234

Significance of Semiconductors:

  • Semiconductors play a crucial role across various sectors like aerospace, automobiles, communications, clean energy, IT, and medical devices.
  • High demand for semiconductors has led to a global chip shortage, impacting growth and jobs in the economy.
  • To address this, the government had sanctioned ₹76,000 crore under the Production-Linked Incentive (PLI) scheme in December 2021 to encourage domestic semiconductor manufacturing.
  • Semiconductors and displays are the backbone of modern electronics, driving the transition to Industry 4.0.