How India can benefit from Taiwan semiconductor technology amid US-China tensions

The US has taken a string of measures, some of which are in effect immediately, to cut China off from certain semiconductor chips made anywhere in the world with the US equipment. The measures are taken to cripple China’s technology sector. To add to China’s woes, Taiwan has signaled that its chip companies will follow the new US rules. The island nation has also expressed desire to share chip-manufacturing technology with India. Amid this geopolitical tension, India could emerge as a winner because it may become a chip-manufacturing hub in South-East Asia with the help of Taiwan expertise in this field.
Taiwan’s role in global tech world
Taiwan is a leader in semiconductor production and is home to Taiwan Semiconductor Manufacturing Company (TSMC) — the world’s largest contract chipmaker and a major supplier to various US companies including Apple. Taiwan has concerns of Chinese companies trying to poach chip talent and technical know-how of chip manufacturing. In addition, China’s military drills near the island in an attempt to force it into accepting Beijing’s sovereignty has made it a global issue. The island nation has found the US as an important international supporter.
What is foreign direct product rule, or FDPR
Recently, the US exercised a provision called the foreign direct product rule, or FDPR, that allows the US to control trading of US technologies. As per the provision, the US can stop any product from being sold if it has been made using American technology.
This means that the US can stop selling any semiconductor manufacturing company that uses American tools (which most do) to China, essentially crippling China’s ability to develop technologies in supercomputing and military applications.

India well-positioned geography
After US-China tensions escalated, tech giants including Apple and Google are reported to be looking at India as an alternate destination for assembling their phones. India is also willing to manufacture semiconductors to address the global shortage in view of the increasing demands.
The recent desire of Taipei’s de-facto Ambassador Baushuan Ger in sharing the country’s expertise with India in critical sectors such as semiconductors, 5G, information security and artificial intelligence could help India become a new manufacturing hub in South-East Asia.
“The signing of the FTA will further remove all trade and investment barriers and lead to a jump in bilateral trade and investment. In addition, it will help attract Taiwan companies to invest in India to establish production bases, sell India-made products to the world, and help India transform into a global manufacturing centre,” Ger told PTI.