Semiconductor chips are the driving force behind the Industrial Revolution 5.0, and they hold the key to India’s path toward super economic power status. However, China poses a potential threat to India’s ambitions in this field. The dependency on a single or dual source of semiconductor chips can put a country under pressure to align its foreign and economic policies with the supplier country.

China’s success in bringing the US to its knees during the Sino-American tech war serves as a visible warning to other nations. Even as India aims to become a semiconductor hub in the next decade, China has ridiculed India’s ambitious plan. Chinese commentators have urged Taiwanese companies to avoid business opportunities in India, signaling China’s dissatisfaction with India’s semiconductor mission.

China’s monopoly over the production of raw materials like Gallium and Germanium gives it the power to disrupt India’s chip production plans. India’s semiconductor mission aims to build a robust semiconductor and display ecosystem to establish itself as a global hub for electronics manufacturing and design. With the rapid growth of India’s economy, the demand for semiconductors is also expected to rise significantly.

While global companies are considering setting up facilities in India to tap into its thriving market for semiconductor chips, they seem to overlook the issue of alternative sourcing for critical raw materials. China’s imposition of export licenses and its dominance in raw materials and packaging pose a challenge for India. India’s dependence on Chinese imports for Gallium and Germanium puts it at a disadvantage.

India, as a member of the Quad alliance, is exploring opportunities for collaboration with the US, Japan, and Australia in semiconductor chip production. However, to achieve self-dependence in the semiconductor supply chain, India needs to address the issue of alternative sourcing for raw materials. Currently, India and its partner countries are critically dependent on China for Gallium and Germanium.

To become self-sufficient in the semiconductor industry, India must master all four segments: raw materials, foundry, fabless design, and packaging. China’s dominance in raw materials and packaging necessitates cooperation and strategic planning by semiconductor companies and countries to counter China’s influence in this field.

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