Amid India’s chip push, Taiwan flags talent gaps, high import tariff

structure and it would require for the Indian government to look at that too, to streamline all kinds of lawsandregulationstohelpsemiconductorinvestorscomingtothe country,” Wu said.

“In order to get the major semiconductor production to move to India, we need to think about the whole supply chain coming together… a whole cluster, rather than just one company. If it is only one company and nobodyelse,thatisnotgoingtohelp. We need to have IC design, testing, packaging and material supply,” he said.

Taiwanishometosomeofthe leading names in chipmaking, including the likes of Taiwan Semiconductor Manufacturing Company (TSMC) which counts Apple and Nvidia among its clients, and United Microelectronics Corporation (UMC). More than 90 per cent of the world’s most advanced chips required for almost all electronic equipment such as smartphones, car components, data centres, fighter jets and AI technologies, are made in Taiwan.

Since the escalation in Uschina tensions, a number of companies, including from Taiwan, have been looking to diversify from Beijing and consider alternate destinations for their supply chains.india,whichhasrolledout a $10 billion chip incentive scheme, has found some success inattractingafoundryinvestment from Tata and PSMC, but bigger names have stayed away so far.

In conversations with Taiwanese government officials and industry executives about India’schipambitions,theundertone was clear: Taiwan is looking at India as a potential investment destination,especiallyintheelectronicsspace,butbusinessesfrom theislandnationhavesomereservationswhichhavestoppedthem from coming to New Delhi so far. Even in PSMC’S case, while it is offeringitstechnologytotataforthe foundry,ithasaverymarginalrole in the financials of putting together the plant, The Indian Express has learnt.

“PSMC is also moving in with a technological cooperation with Tata (to set up a foundry in India). There are other companies in Taiwan which are thinking about possibilitiesofsettinguptheiroperations in India, but the difficulty forthesemiconductorindustryto start work in a new site is that there need to be some good conditions,” Wu said.

The Indian government has created a dedicated task-force called the India Semiconductor Mission, which aims to serve as a focal point for an efficient implementation of New Delhi’s chip ambitions. All land-related clearances for the four semiconductor facilities that have been approved sofar–threeassemblyoperations that include Micron’s packaging plantandonefab–weredoneexpeditiously, as the Centre worked with the state governments of Gujarat and Assam where these operations are being set up. The ground-breakingceremonyofthe TATA-PSMC fab happened within two weeks of getting clearance.

Taiwanese chip companies havered-flaggedindia'slackofadequate infrastructure needed to support the task of making semiconductors. Infrastructure is the backbone of Taiwan’s Hsinchu Science Park, which is home to TSMC, UMC and others, dotted withtheirsuppliersforgases,water and equipped with schools, colleges, residential complexes and a thriving night-life to incentivise engineers from around the world to stay there.

“Infrastructurehastobethere. This is an area that our (semiconductor) industry is not quite certain about (in terms of India) -- reliable supply of water and electricity. Other than that, transportation has to be there,” Wu said. For example, in 2007, the beginning of the Taiwan High Speed Rail (THSR) enabled TSMC engineers in Hsinchu, Tainan and Taichung to go back and forth in a day to provide frequent cross-fab support.

Taiwan’s Deputy Minister of the National Development Council (a government planning bodysimilartoindia’snitiaayog), Kao Shien-quey, said she too has received similar feedback from Taiwanese businesses, and called for the two countries to sign an FTA. “What I’m hearing from some Taiwanese businesses who areconsideringinvestinginindia, the regulations there differ from state to state and sometimes it is difficultforbusinessestonavigate, whichdoespresentacertainlevel of difficulty. The other thing that I hear is that the infrastructure could be better, I know the Indian governmentisdoingalottomake it better,” she said.

“According to my understanding,thenegotiation(forfta)isstill going on and the Taiwanese governmenthasverystrongintention to sign that agreement with the Indian government,” she said.

Foreign Minister Wu said the FTA will be crucial in attracting suppliers from Taiwan to set up operations in India. “If we are thinking about attracting a large number of hi-tech companies to India, we need to think about a very simple architecture called a free trade agreement (with Taiwan), because they need to move material, machines, goods to India and if the tax rate or tariff is very high, those are going to be impediments,” he said.

“So if the Indian government is serious about putting all this together, I’m sure it is going to be veryattractivetothesemiconductorindustrytothinkaboutinvesting in India,” he added.

Another key challenge that Indianeedstoaddress,asperwu, is trained semiconductor engineers. While India has a big talent pool of chip designers who work at all major global semiconductor companies, it has little to show in terms of engineers who can work on chip factory floors. Wu said Taiwan and India can collaborate on that.

“In Taiwan, we have a sufficient number of engineers who are ready to work in the semiconductor industry — we not only have universities training good engineers but also dedicated semiconductor academies,” Wu said.

“In the case of India, I know thereisalotoftalent,buttheymay notbefallinginthecategoryofexperiencedengineersforthesemiconductor industry, and that is how Taiwan can start working withindia--inviteengineersfrom there to work in Taiwan. Right now we have 2,700 very high quality engineers from India workingintaiwan’shi-techcompanies,” he added.

Privately, Indian government officials also confirmed that their Taiwanese counterparts have flagged India's lack of semiconductor engineering talent who can work on foundry floors as among the reasons that are stopping Taiwanese chip companies from coming to India.

(The reporter was in Taiwan at the invitation of the East-west Center, an educational institution founded by the US Congress.)