Dubbed as a “watershed arrangement” between the United States and India, the stage is set for building a semiconductor fabrication plant or ‘Fab’ at Jewar in Uttar Pradesh, India. The Fab has been christened as ‘Shakti’ and is expected to be operational in 2025. This is the fourth such plant to be built in India including the three others i.e. (a) Semiconductor Fab for 50,000 wafers at Dholera, Gujarat by TATA; (b) Semiconductor ATMP (Assembly, Test, Marking and Packaging) unit at Morigaon, Assam; and (c) Semiconductor ATMP unit for specialized chips at Sanand, Gujarat.

The objective of Shakti Fab is to manufacture “infrared, gallium nitride and silicon carbide semiconductors”. This is an initiative between India Semiconductor Mission and strategic technology partnership between Bharat Semi, 3rdiTech, and the U.S. Space Force. It will also contribute to “advanced sensing, communication, and power electronics for national security, next generation telecommunications, and green energy applications”. Perhaps what merits attention is that the plant will produce military grade semi-conductors to be used in “advanced warfare technologies, including night vision devices, missile-seekers, space sensors, drones, fighter jets, and more.”

It is well known that semiconductors are game changers and have the requisite technological powers to “revolutionize autonomous decision-making, threat assessment, and even predictive maintenance of military equipment and logistics”. These attributes can significantly improve the war fighting capabilities on land, at sea, in the air-space.

Semiconductors enhance the effectiveness of military hardware through “Superconductivity” which catalyzes “sensitivity, accuracy and performance advantages beyond the theoretical limits of conventional electronics technology”. For instance it reduces “size and weight” in the order of 50-70 % thereby supporting miniaturization. In particular, the “small size, low power consumption, and high reliability” of semiconductors contributes to the “compactness, efficiency, and durability” of the equipment.

Semiconductors are also enablers for “faster data transmission, improved signal quality, and enhanced connectivity”. Among the many uses, the role of semiconductors in “encryption technologies” ensures “secure communication and protecting sensitive military information from unauthorized access”. Similarly, the effectiveness of a Radar can be upended by the use of semiconductors through “creation of high-frequency amplifiers and signal-processing components” which results in better detection and attack the target accurately.

The global military and aerospace semiconductor market is quite promising and is estimated to grow by US$ 3.02 billion at a CAGR of 5.56% between 2023 and 2028. There is wide spread use of semiconductors in the US military hardware and nearly 40 % of the growth in global military and aerospace semiconductor demand is forecast to come from the US which is an undisputed leader in military technology research and development. In particular, the US has been producing high end unmanned aerial vehicles (UAVs) and unmanned surface vehicles (USVs) for intelligence, surveillance, and reconnaissance (ISR) missions and unmanned combat aerial systems (UCAS) have further added to the demand for semiconductors.

India's semiconductor requirements are growing steadily to support growth in several strategic sectors such as the aerospace, military and defense, green energy, etc. which are now embracing Industry 4.0 revolution technologies. According to a KPMG study, India will require 1.2 million skilled workers in the semiconductor sector by 2032, and according to PwC the semiconductor market in India will exceed $55 billion by 2026 with domestic electronics production output projected to surpass US$ 300 billion by 2030.

The government is cognizant of the human resource requirement in this sector and a Semiconductor Research Centre is being set up to produce 85,000 technicians and engineers. It has also announced INR 1 trillion fund for the Anusandhan National Research Foundation to “energise India’s research ecosystem and foster innovation in cutting-edge semiconductor technology”.

India is exploring partnership with other countries such as Japan, Taiwan, Korea which along with the US, and China who are the current leaders in design and manufacturing of semiconductors. In July 2023, India and Japan signed the Memorandum of Cooperation on Semiconductor Supply Chain Partnership. In February 2024 the government approved the first semiconductor fab to be set up jointly by Tata Group in collaboration with Powerchip Taiwan at Dholera in Gujarat with a capacity of 50,000 wafers per month. Similarly, the Hyderabad based ASIP (Advanced System in Package Technologies) and Korean firm APACT Limited have announced investment of Rs. 890 crore plans for a semiconductor assembly and testing facility in Hyderabad.

While these initiatives are laudable, it remains to be seen if there are limitations-conditions which preclude the use of the products from foreign Fab projects for military purposes. In particular, such restrictions may come from the Japanese investments who are constrained by their Constitutional requirements which forbid exporting some types of military related technology.

Be that as it may, Shakti is a ground-breaking initiative between India and the US and provides the desired impetus to the US-India Comprehensive Global and Strategic Partnership. Significantly, President Biden and Prime Minister Narendra Modi have labelled the U.S.-India Major Defense Partnership a “pillar of global security and peace, highlighting the benefits of increased operational coordination, information-sharing, and defense industrial innovation”. Shakti also dovetails into Prime Minister Modi’s vision that “every device in the world will have an Indian-made chip,” through domestic production, and as a corollary, it augments the indigenous military industrial complex and be the catalyst for ‘Make in India’ vision of the Indian armed forces.

Dr. Vijay Sakhuja is Professor and Head, Center of Excellence for Geopolitics and International Studies (CEGIS), REVA University, Bengaluru and is associated with Kalinga International Foundation, New Delhi.