Higher levy on semiconductors unlikely to impact domestic firms

Nascent Stage

- JATIN GROVER

THE PROPOSED 25% tariff on semiconductors by US President Donald Trump is unlikely to affect India's semiconductor companies, industry players and experts said, citing two key reasons.

First, India's semiconductor ecosystem is still in its early stages, and the country does not currently export chips. Second, even as India develops its chip manufacturing and assembly ecosystem in the coming years, it will primarily operate under a "chip manufacturing-as-a-service" model. This means chips produced in India will cater to global clients, not just the US.

At present, five semiconductor projects are underway in India, including an assembly, testing, marking, and packaging (ATMP) unit by Micron, a fabrication and OSAT unit by the Tata Group, and OSAT units by Kaynes and CG Power.