Lessons from US CHIPS Act: A Blueprint for India's Semiconductor Success

Drawing Insights from the US CHIPS Act: A Blueprint for India's Semiconductor Industry

As the United States marks the one-year anniversary of the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act), it presents a valuable opportunity for India to glean insights from its implementation. While the Act's long-term impact is still unfolding, its provisions and strategies can serve as a guide for India to bolster its semiconductor industry. This article delves into the key aspects of the CHIPS Act and highlights the lessons that India can adopt to enhance its semiconductor ecosystem.

The US CHIPS and Science Act, 2022:

The CHIPS Act, a groundbreaking initiative, allocates $52.7 billion over five years to stimulate investments in domestic semiconductor manufacturing capabilities. Its primary goals encompass enhancing US competitiveness, fostering innovation, and fortifying national security. The Act also aims to accelerate research and development (R&D) in cutting-edge technologies like quantum computing, artificial intelligence (AI), clean energy, and nanotechnology. Furthermore, it strives to create novel high-tech hubs regionally and cultivate a diverse science, technology, engineering, and math (STEM) workforce.

Key Features of the US CHIPS Act:

1. Interdepartmental Collaboration:

Central to the CHIPS Act is the harmonious collaboration between various government entities. This multi-pronged approach establishes four distinct funds for executing the Act's provisions. The Department of Commerce spearheads the 50 billion dollars CHIPS for America Fund, overseeing semiconductor research and manufacturing acceleration. Other departments include the Department of Defense (2 billion dollars) for defense-specific technologies, the Department of State (0.5 billion dollars) for semiconductor supply chain security coordination with international partners, and the National Science Foundation (0.2 billion dollars) for nurturing the semiconductor workforce.

2. Workforce Development Strategies:

Companies seeking support under the CHIPS Act are required to present workforce development plans. A central entity, the National Semiconductor Technology Centre (NSTC), has been established to collaborate with both industry and educational institutions, promoting a skilled workforce pipeline.

3. Encouraging Private Sector Investment:

The CHIPS Act introduces a CHIPS Program Office (CPO) to establish guidelines for evaluating project feasibility. The CPO is in the process of recruiting Investment Principals and Financial Structuring Directors to stimulate private sector investments.

4. Forward-Looking Research and Innovation:

The CHIPS Act transcends domestic semiconductor manufacturing revitalization, allotting $11 billion for forward-looking research endeavors. Notably, it emphasizes advanced packaging as a pivotal avenue for semiconductor excellence. To this end, the Act envisions the National Advanced Packaging Manufacturing Program (NAPMP) to secure a substantial competitive edge in the future.

India's Semiconductor Progress and Learning Opportunities:

The Indian Semiconductor Mission (ISM), launched in 2021 with an allocation of Rs. 76,000 crores, endeavors to establish a self-sustaining semiconductor and display ecosystem. Drawing inspiration from the CHIPS Act, India can derive the following lessons:

1. Comprehensive Governance Approach:

India's semiconductor initiatives predominantly fall under the Ministry of Electronics and Information Technology (MeitY). To ensure long-term continuity, a whole-of-government approach, akin to the CHIPS Act, is advisable.

2. Prioritizing Skill Development:

A skilled semiconductor engineering workforce is pivotal for India's success. The Chips2Startup (C2S) program, like the NSTC, should collaborate with universities and focus on accrediting quality training programs to align with industry needs.

3. Enhanced Transparency and Accountability:

India can adopt the US model of regular progress reports to enhance transparency and manage expectations in its semiconductor programs.

4. Forward-Focused R&D:

Incorporating the CHIPS Act's futuristic research approach, India should allocate resources for advanced manufacturing and packaging research to stay competitive in the semiconductor landscape.

Conclusion:

The CHIPS and Science Act offers a valuable framework for India's semiconductor industry. By studying its merits and drawbacks, India can tailor its strategies to effectively implement semiconductor-focused industrial policies. Just as the US Act has institutionalized its goals, India's semiconductor strategists can utilize these insights to pave the way for a thriving semiconductor ecosystem that transcends government transitions.