EAM S Jaishankar's Japan, Korea visits to focus on semiconductor push

South Korea has the 2nd-largest share of the global chip market and manufactures 60% of global memory chips

Strengthening the semiconductor supply chain and pitching India as a viable destination for chip manufacturing will be External Affairs Minister S Jaishankar's priorities during his four-day visit to South Korea and Japan beginning Tuesday, said people in the know.

While Jaishankar will officially be visiting Seoul for two days to attend the 10th India-Republic of Korea Joint Commission Meeting, he will also be meeting South Korean dignitaries, heads of think tanks and Indian community members.

“Some of these meetings will discuss how to bring together the semiconductor trade between both the nations,” a diplomatic source said.

Semiconductors are essential components of electronic devices, enabling advances in communications, computing, healthcare, military systems, transportation, clean energy, and countless other applications.

Beginning December 2021, the government had approved $10 billion or Rs 76,000 crore incentives to build the semiconductor ecosystem in India.

While the focus has remained on Taiwanese semiconductor manufacturers in India, the government is also eyeing South Korea owing to its dominance in producing certain categories of chips.

The country commanded a 17.7 per cent share of the overall $604 billion global semiconductor market in 2022. It continued to rank No. 2 in the world for 10 straight years since 2013, according to Invest Korea.

More importantly, South Korea accounted for 60.5 per cent of the global memory semiconductor market.

Consequently, it had a 70.5 per cent share in the dynamic random-access memory (DRAM) market and a 52.6 per cent share in the NAND flash memory chips.

“The teams may also discuss a semiconductor supply chain partnership between India and South Korea, along the lines of the one signed with Japan in July 2023,” the person said.

Over the weekend, IT and Telecom Minister Ashwani Vaishnaw said India will be in a position to compete with Taiwan, South Korea and China in the global semiconductor manufacturing race.

Last week, the Cabinet approved proposals to set up three semiconductor plants, including the country's first mega chipmaking fab unit by the Tata Group, at a cumulative investment of Rs 1.26 trillion.

Expanding its presence in semiconductor manufacturing would build on India’s decades-long experience in semiconductor design, where it accounts for 20 per cent of the world’s integrated circuit (IC) design workforce with over 125,000 employees, a joint report by the semiconductor industry bodies of India and the United States pointed out in a report last month.

The study by the Semiconductor Industry Association (SIA) and the India Electronics and Semiconductor Association (IESA) said India has the potential to expand presence in the semiconductor assembly, test, and packaging (ATP) segment to as many as five facilities. It can attract fabs producing legacy semiconductors at 28 nm or above in the next five years.

Japan visit

After South Korea, Jaishankar's next stop in Tokyo on 6-8 March may also see conversations around semiconductors during the 16th India-Japan Foreign Ministers Strategic Dialogue.

The sector has been mentioned by the government to be among the discussion areas. However, India's multifaceted relations with Japan will also mean the talks may cover defence, digital technologies, semiconductor supply chains, clean energy, high-speed rail, industrial competitiveness and connectivity. Jaishankar and his Japanese counterpart are also expected to discuss issues of bilateral, regional and global importance. “They will exchange views on cooperation for a free, open, inclusive, peaceful and prosperous Indo-Pacific,” the Ministry of External Affairs (MEA) has said.

Jaishankar will also participate at the first Raisina Roundtable in Tokyo, a new initiative under the MEA's annual multilateral geopolitical conference Raisina Dialogues. The roundtable is a key step towards enhancing track-2 exchanges between India and Japan, the MEA has said.