India and Singapore Eye Future Growth in Semiconductors

September 5, 2024 Posted by India Briefing Written by Archana Rao Reading Time: 2 minutes

India’s Prime Minister Narendra Modi recently held high-level talks with Singaporean leaders, focusing on key areas such as advanced manufacturing, digital transformation, healthcare, and sustainability.

The two countries have also signed a memorandum of understanding (MoU) to partner and cooperate in the field of semiconductor ecosystems.

In a meeting on September 4, 2024, Modi and Singapore’s Prime Minister Lawrence Wong agreed to elevate their bilateral relationship by establishing a Comprehensive Strategic Partnership. On the second day of Modi’s visit, September 5, an MoU was signed between Singapore and India to collaborate and work together in the semiconductor industry.

According to the official statement issued by the Singaporean government, the goal of the MoU is to support India’s growing semiconductor industry while facilitating Singapore’s ecosystem of semiconductor companies and related supply chains to participate in the fast-growing Indian market.

Focus on semiconductor cooperation

India and Singapore unveiled four key agreements, primarily targeting the semiconductor sector. The semiconductor ecosystem partnership seeks to support India’s growing semiconductor industry while facilitating greater market access for Singaporean companies.

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This collaboration underscores the increasing importance of the semiconductor industry for both nations. The leaders of both countries toured AEM, a leading Singaporean semiconductor and electronics company, where they were briefed on the company’s role in the global semiconductor value chain and its plans for expanding operations into India. Additionally, the Singapore Semiconductor Industry Association presented insights into Singapore’s semiconductor ecosystem and potential opportunities for collaboration with India.

Singapore’s semiconductor industry, despite its prominence in global production (contributing 10 percent of the world’s semiconductor output), faces limitations in terms of land and labor constraints. On the other hand, India, with its abundant land and skilled labor, holds the potential to integrate into Singapore’s semiconductor value chain. While Singapore focuses on mature-node chips for appliances and industrial equipment, the production of high-end AI logic chips remains outside its current capabilities. Rising costs and global competition may challenge Singapore’s position in the semiconductor market over time.

Also Read: India’s Semiconductor Sector: Tracking Government Support and Investment Trends

Other key agreements

In addition to semiconductors, the two nations signed agreements in digital technology, healthcare, and education. The digital technology MoU is aimed at fostering greater interoperability between India and Singapore’s digital economies, building on previous projects such as linking their digital payment systems. It focuses on data protection, cybersecurity, digital public infrastructure, and enhancing business collaboration.

The education and skill development MoU promotes cooperation in technical and vocational training, while the healthcare and medical research MoU emphasizes pandemic preparedness, disease surveillance, and controlling communicable diseases.

Strengthening ties and regional stability

During his talks with Prime Minister Wong, Modi emphasized the importance of continuing collaboration to ensure regional peace, stability, and prosperity. He highlighted Singapore’s central role in India’s Act East policy, describing the country as an “anchor” for the initiative launched a decade ago.

On August 24, 2024, an India-Singapore Ministerial Roundtable was held here in New Delhi, which identified potential areas for further cooperation, such as skilling, digitalization, advanced manufacturing, AI, and cybersecurity.

India and Singapore have partnered on notable technological projects such as the launch of 17 Singaporean satellites from India in July 2023 and the strengthening of defense cooperation. The two countries also forged a partnership between Singapore Airlines and Air India.

The latest visit reinforced the strong and evolving relationship between India and Singapore, with both countries committed to deepening their economic and technological collaboration.

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