The insiders have revealed that Japan is entering India’s semiconductor dream with full vigour, second only to none. It has possibly left behind the South Koreans and Taiwanese as India begins to build the entire edifice of chip-making from scratch.
Long-time players in India, Japanese companies quickly recognised the potential of sending in equipment of the highest order to kick-start the local semiconductor scene.
“Japan’s got the edge in machinery and raw materials,” Takashi Suzuki, director general of Japan External Trade Organisation (Jetro), told ET. “Our companies hold over 30% of the global market for semiconductor equipment and 48% for parts and materials, making us a backbone of the chip supply chain.”
Suzuki noted a Jetro survey showing that US foreign direct investment (FDI) in India jumped from 11 projects between 2017-2020 to 30 between 2021-2024, a 172% spike. Japan’s FDI, though, soared from one to eight in the same periods, a whopping 700% leap, topping all other nations.
At last month’s SemiConnect event in Gujarat, Japan sent a hefty 75-member team, the biggest delegation, to connect key players across the semiconductor ecosystem.
Experts say South Korea and Taiwan are itching to catch up and are eager to ramp up their stakes in India’s chip game.
“Korea’s just waking up to India’s semiconductor boom,” said Heikki Ranta, chairman of the Finland Chamber of Commerce and Industry in Korea. “So far, they’ve tagged as subcontractors for big Korean firms in India. But Korea’s a powerhouse in chip production now, with homegrown tech that could be a game-changer for India.”
Zena Chung, founder president of the Indo-Korea Business Culture Centre, said Korean companies are “buzzing” about India’s prospects.
“India’s shaping up as a manufacturing hotspot, especially for firms looking beyond China,” she explained. “More Korean players should jump in, and India needs to roll out the welcome mat with eco-friendly vibes to make them feel at home. That’s how we’ll see Korean tech leaders thrive here as Japan’s firms have and grab this semiconductor chance.”
Sana Hashmi, a fellow at the Taiwan-Asia Exchange Foundation, said Taiwanese and South Korean chip companies are “watching and learning” from Japan’s wins in India, mirroring their playbook.
“Japan’s seasoned approach has set the bar high,” Hashmi noted. “Taiwan and South Korea are taking notes teaming up with locals, navigating India’s rules, and tapping its talent pool, all while pushing for cutting-edge tech and infrastructure.”
But she warned that they were still very much in the fight. Japanese companies are ahead by light years as they see India as a mine for growth through demand in a host of significant innovations-such as the automotive sector, IoT, and 5G. “That’s why India is making headway in the government to government schemes, such as PLI: hot territory for potential investors,” Hashmi said. “All the big guys such as Tokyo Electron and Renesas are linking with Indian partners to strengthen supply chains and share know-how. They’re betting on India’s young, tech-hungry workforce, ready to be trained.” For such companies, India is not just a market in which to sell their products: it is a place to surf on the continuous ascent of the tech tide in this country over the long haul.