The US Department of State has partnered with the India Semiconductor Mission (ISM), under the Ministry of Electronics and IT, to investigate cooperation prospects, which is a critical step towards altering the global semiconductor 
ITSI Fund to Create New Partners for US Chip Goals
The ITSI fund, which has a $500 million coffer to be used or invested for five years at a rate of $100 million annually, aims to enhance the semiconductor ecosystem in the partner states of the US government.
The International Technology Security and Innovation (ITSI) Fund, established by the CHIPS Act of 2022, is a part of the US’s larger strategic strategy, which includes this cooperation. Its goal is to ensure a more robust, diverse, and sustainable global semiconductor supply chain.
According to US State Department’s official statement, “This collaboration will contribute to building a more robust, safe, and sustainable global semiconductor supply chain.”
ISM and US To Explore Conducive Environment
This partnership’s first phase entails a thorough evaluation of India’s current workforce and infrastructural requirements, as well as its regulatory environment and semiconductor ecosystem.
The statement went on, “State expects that important Indian stakeholders, including state governments, academic institutions, research facilities, and private businesses, will take part in this analysis led by the India Semiconductor Mission.” “The assessment’s findings will provide the foundation for possible future cooperative efforts to develop and expand this vital industry.”
The US Department of State is collaborating with the Government of India to find ways to develop the global semiconductor ecosystem through the ITSI Fund, stated J Robert Garverick, Deputy Assistant Secretary of State for Trade Policy and Negotiations, during the event. The CHIPS Act, which President Biden signed into law two years ago, encourages the growth of a safe worldwide semiconductor supply chain.
Expert’s Views
Pareekh Jain, CEO of Pareekh Consulting, stated that “this agreement is an important step in developing the semiconductor ecosystem in India.” “The US is home to numerous sizable semiconductor companies and is the largest end market for semiconductors. India is home to design and research centers for nearly all US semiconductor businesses. A few businesses, including Micron, have also begun producing goods in India.
According to Everest Group partner Akshat Vaid, the US-Indian relationship is a step toward the long-term diversification of the global semiconductor supply chain. “At the moment, the industry is heavily concentrated in a few dominant regions, such as South Korea and Taiwan; China, despite numerous regulatory obstacles, has also begun to gain prominence in the industry.”
The Need For Resilient Supply Chain
With the ongoing global digital transformation, semiconductors have emerged as the backbone of industries spanning from automotive to healthcare. The pandemic laid bare the fragility of the semiconductor supply chain, triggering global shortages that disrupted industries across the board.
By strengthening production capacity, guaranteeing diversification, and lowering reliance on a small number of important markets, this new partnership between the US and India is viewed as a crucial step in addressing such vulnerabilities.
Redefining the CHIPS Act
Enacted in 2022, the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act provided $500 million over five years through the ITSI Fund to support innovation and security in semiconductor manufacturing. This collaboration demonstrates the US’s dedication to creating a safe, international tech infrastructure by partnering with India, a country that is leading the way in semiconductor manufacturing.
ISM CEO to Lead The Joint Vision
This study will heavily rely on the India Semiconductor Mission (ISM), in which state governments, academic institutions, research centers, and commercial businesses in India are expected to participate. “We are happy to partner with the US in conducting this study to access the ITSI Fund,” said ISM CEO Akash Tripathi. We hope to further improve our semiconductor ecosystem by concluding the study in the upcoming months.”
