South Korea and Taiwan Follow Japan's Lead in India's Semiconductor Push

Japan has emerged as a key player in India’s semiconductor push, with South Korea and Taiwan stepping up efforts to match its early gains, according to multiple industry sources. Japanese companies, leveraging strengths in equipment and raw materials, were among the first to support India’s developing chip ecosystem.

Takashi Suzuki, Director General at Japan External Trade Organisation (Jetro), highlighted Japan’s significant share in the global semiconductor manufacturing equipment (30%) and parts and materials (48%) markets. These capabilities are seen as vital to India’s supply chain development.

Foreign direct investment (FDI) from Japan into India grew sharply—from just one investment between 2017 and 2020 to eight between 2021 and 2024, marking a 700% rise, the highest growth among investing countries. Comparatively, US investments increased from 11 to 30 in the same periods, reflecting a 172% increase.

Japan also sent the largest foreign delegation—75 members—to the SemiConnect event held last month in Gujarat, reinforcing its commitment to India’s chip ambitions. South Korea and Taiwan, while late to enter, are accelerating their involvement. Heikki Ranta of the Finland Chamber of Commerce and Industry in Korea noted that Korea is moving beyond subcontracting roles to bring its advanced semiconductor technologies into India.

Zena Chung of the Indo-Korea Business Culture Centre said Korean firms are increasingly viewing India as a viable alternative to China and urged India to enhance support and infrastructure to attract more Korean participation.

Sana Hashmi of the Taiwan-Asia Exchange Foundation observed that Taiwanese and South Korean firms are adopting Japanese strategies—prioritising partnerships, regulatory adaptation, and local talent—to establish a foothold. However, she added that Japanese companies retain a lead due to early investment and a broader view of India's growth potential in automotive, IoT, and 5G sectors.

Japanese firms such as Tokyo Electron and Renesas are collaborating with Indian partners to develop supply chains and invest in workforce development, aligning with government incentives for local manufacturing.