Technology India

US Tech Firms Boost India Investments Amid Increase in Strategic Ties

India Asia

In the recent past, the global semiconductor industry has witnessed a noticeable shift, particularly in investment patterns and strategic relationships. Two recent investment announcements — one by Advanced Micro Devices, Inc (AMD) in Bengaluru, Karnataka State, India, and another by Silicon Power Group in Odisha State, India highlight a strengthening relationship between India and the United States amid global strategic competition in the chip industry.

AMD, known for its top-notch processors since 2001, recently announced plans to invest a whopping $400 million into a new Bengaluru campus, aiming to build it into a global design hub. This investment is forecasted to create about 3,000 engineering jobs in the region by 2028.

I welcome AMD's decision to set up its largest R&D (research and design) center in India and expansion of the India-AMD partnership. It will certainly play a vital role in building a world class semiconductor design and innovation ecosystem. It will also provide tremendous opportunities for our large pool of highly skilled semiconductor engineers and researchers," said Mr. Rajeev Chandrasekhar, the Indian Minister of State for Electronics and IT, Skill Development and Entrepreneurship.

The other American tech firm, Silicon Power Group has announced a planned investment of around $121.73 million in Odisha. This initiative is expected to transform the eastern corridor of India by creating diverse job opportunities, from technical to administrative roles. Additionally, this investment will bring new technological advancements.

This development is particularly significant given that China has been the primary powerhouse in the global tech and manufacturing arena. However, the dynamics are gradually changing as economic, political, and supply chain considerations push companies to consider alternatives.

These proactive steps by US tech giants emphasize the evolving US-India strategic technology partnership. This emerging diversification strategy, often coined as the "China plus One" approach, is gaining traction. And India, with its pool of tech talent and a government keen on modernizing its policies, is emerging as a top contender.

Furthermore, other US tech heavyweights like Micron have pledged substantial investments in India. During Prime Minister Narendra Modi's State Visit to the United States in June, Micron announced a robust $825 million commitment. The State Visit was instrumental in cementing several accords that paved the way for deeper Indo-American collaboration. Notably, Applied Materials and Lam Technologies are investing $400 million to enhance the skills of 80,000 Indian engineers.

These recent investments and partnerships indicate a shift in the global tech industry's focus. US tech companies are increasing their collaborations and investments in India, recognizing its potential in the semiconductor industry. This trend suggests a pragmatic realignment in the industry's future dynamics and underscores the growing importance of India in the sector's landscape, aligning with the broader narrative that positions India as a strategic partner in the industry's future.

Lian Thawng Hnin is a participant in the Young Professional Program with the East-West Center in Washington. He is a graduate student at The Fletcher School of Law and Diplomacy, Tufts University, focusing on international security and trade relations with a regional focus on Southeast Asia.