In the fast-evolving landscape of global technology, semiconductors play a pivotal role as the backbone of modern industries. The recent Memorandum of Understanding (MOU) between the Government of the Republic of India and the European Commission marks a significant milestone in fostering international collaboration in the semiconductor ecosystem. This article explores the key elements of the MOU and its potential impact on Indian companies, coupled with India’s proactive measures to bolster its semiconductor prowess.
In an era where the semiconductor supply chain spans across borders, the need for international cooperation is paramount. The MOU between India and the EU underscores a commitment to deepening collaboration on semiconductors, supply chain resilience, and innovation. Recognizing the global nature of the semiconductor sector, both parties aim to coordinate policies strategically, as outlined in the EU-India Trade and Technology Council (TTC).
The MOU outlines a framework for bilateral collaboration, with a focus on enhancing the resilience of semiconductor supply chains. One key aspect is the inclusion of the semiconductor ecosystem as a sector for cooperation under the EU-India TTC Working Group on Strategic Technologies. The Working Group serves as a platform for exchanges, research and development initiatives, and transparency measures related to subsidies in the semiconductor sector.
The semiconductor industry, a key player in the global electronics sector, continues to witness robust growth. The Semiconductor Industry Association (SIA) reported the industry generated revenues of $40.7 billion in May 2023 globally, up 1.7% from April 2023. From the previous year until September 2022, the global semiconductor industry was valued at $500-$600 billion and complements the global electronics industry worth approximately $3 trillion. According to the Strategic Investment Research Unit (SIRU), the Indian semiconductor market has been estimated to be worth $23.2 billion and will continue to expand at a compound annual growth rate (CAGR) of 17.10% to reach $80.3 billion by 2028.
Key players in the Indian semiconductor market include Broadcom India Private Limited, Tata Elxsi Limited, NXP Semiconductors India Private Limited, CG Power and others.
Reports from McKinsey suggest that the global semiconductor industry is on track to become a trillion-dollar industry by 2030, with sustained annual growth ranging from 6% to 8%. Against this backdrop, the India-EU MOU positions both regions strategically to tap into the exponential growth of the semiconductor industry.
The MOU between India and the EU sets the stage for enhanced collaboration in the semiconductor sector, emphasizing the importance of resilience and innovation in the global supply chain. As India makes significant strides in semiconductor initiatives, the stage is set for the country to emerge as a formidable force in the semiconductor landscape. With proactive government measures and strategic international collaborations, India is poised to play a defining role in the future of semiconductors.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
Enjoy Zero Brokerage on Equity Delivery
Join our 1.75 Cr+ happy customers
Enjoy Zero Brokerage on