Japanese Companies Keen To Invest In India's Semiconductor Manufacturing Ecosystem: Deloitte

In July, Japan became the second Quad partner, following the US, to sign an agreement with India aimed at jointly developing the semiconductor ecosystem

With approximately 100 semiconductor manufacturing plants, Japan ranks among the top five countries in the global semiconductor ecosystem

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Japanese companies are eager to establish semiconductor manufacturing units in India, bringing the necessary expertise and specialisation to collaborate with domestic firms, according to a Deloitte report. The firm highlighted that a skilled workforce, access to funds, and sustained support measures are essential to drive the growth of India's semiconductor sector.

Shingo Kayama, Deloitte AP and SRT Leader at Deloitte Japan stated that Japanese firms are "super enthusiastic" about India's potential.

In July, Japan became the second Quad partner, following the US, to sign an agreement with India aimed at jointly developing the semiconductor ecosystem and strengthening the resilience of global supply chains. The memorandum of understanding focuses on semiconductor design, manufacturing, equipment research, talent development, and enhancing supply chain resilience.

With approximately 100 semiconductor manufacturing plants, Japan ranks among the top five countries in the global semiconductor ecosystem. It is home to companies that are world leaders in producing semiconductor wafers, chemicals and gases, lenses used in chip manufacturing equipment, and display technologies.

India aims to establish ten semiconductor manufacturing plants within the next decade. Rohit Berry, President of Strategy, Risk and Transactions, Deloitte India, said, "Given the technology, given the specialisation, there is no better partner to get on to developing such an ambitious and critical ecosystem of semiconductors than Japan."

He explained that the semiconductor narrative in the country goes beyond building a single factory and encompasses the development of the entire ecosystem.

"And that is where many Japanese companies who have set up such ecosystems in Japan or in any other places are going to be absolutely critical to set it up (in India). So this is the vision. This is a grand plan. This is the investment. This is the commitment," he added.

Berry also said that establishing the right partnerships between Indian and Japanese firms is crucial for the sector's growth. "This is not a one year game, it's not a two year game. This will basically benefit us and Japan for generations," he said.

He further highlighted that the government's sustained incentive program will play a key role in the sector's growth in India.

When asked about specific support measures from state governments, he noted that a "centre-state partnership, together with the private and Japanese partnership, all four of them coming together will be a prerequisite to create a once in a lifetime setup."