Vineet Ravindran asked: Does a chip foundry company like TSMC help any host nation acquire the technology, and how so?

Cherian Samuel replies: Leading-edge semiconductor companies like TSMC (Taiwan Semiconductor Manufacturing Company) are courted by many countries to set up plants for chip manufacturing. Semiconductor chips have multiple applications and have acquired the status of strategic assets, especially in the aftermath of the pandemic-led shortage of these items which are used in everything from cars to toys to military drones. Even if a company were willing to set up a plant, the complex and expensive manufacturing process calls for billions of dollars, either by way of investment or subsidies on the part of governments. As a case in point, the most recent announcement by TSMC that it will set up a foundry in Arizona in the United States is on the basis of the promise of substantial subsidies from the US government.

Please also refer to the following MP-IDSA Publication:
Cherian Samuel, “Bringing the Semi-Conductor to India”, Comment, 26 March 2021.

Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.

Posted on 17 November 2021