India and Singapore Forge Strategic Semiconductor and AI Alliances to Reshape Global Supply Chains

The global semiconductor supply chain, long dominated by Taiwan and the U.S., is undergoing a seismic shift as India and Singapore deepen their collaboration in artificial intelligence (AI) and semiconductor research. This partnership, driven by geopolitical diversification and supply chain resilience, is positioning the Indo-Pacific as a critical hub for next-generation technology.

Strategic Motivations: Geopolitical Diversification and Economic Resilience

The semiconductor industry’s vulnerability—exemplified by Taiwan’s production of over 60% of the world’s chips—has spurred nations to seek alternatives. India and Singapore’s collaboration aligns with global trends of localization and reshoring, aiming to reduce reliance on concentrated manufacturing hubs. India’s Production-Linked Incentive (PLI) schemes and the Make in India initiative have catalyzed domestic semiconductor growth, projecting a market expansion from ₹4,50,164 crore (US$52 billion) in 2024 to ₹8,95,134 crore (US$103.4 billion) by 2030 [1]. Meanwhile, Singapore’s advanced infrastructure and geopolitical neutrality make it an ideal partner for joint ventures in chip design and AI integration [2].

A pivotal agreement between IIT Kharagpur and Singapore’s Institute of Microelectronics (IME), signed on May 29, 2025, underscores this collaboration. The partnership focuses on semiconductor research, talent development, and energy-efficient AI solutions, reflecting both nations’ ambitions to lead in next-generation technologies [1].

Policy Frameworks and Investment Trends

India’s PLI schemes have attracted investments from industry giants like Vedanta Limited and Tata Electronics, which are developing 7nm fabrication facilities and mega semiconductor plants [1]. These efforts are complemented by Singapore’s strategic investments in advanced packaging and design, creating a symbiotic ecosystem. For instance, Tata Electronics’ collaboration with PSMC in Dholera leverages Singapore’s technological expertise while tapping into India’s growing domestic demand [1].

While no explicit funding agreements between India and Singapore have been announced for 2023–2025, the two nations are aligning their policies to foster innovation. India’s Semicon India Programme and Singapore’s focus on AI-driven chip design are expected to catalyze joint ventures in the coming years [2].

Supply Chain Resilience and Regional Implications

The India-Singapore partnership addresses critical supply chain vulnerabilities. By localizing production and diversifying manufacturing bases, the duo aims to mitigate risks from geopolitical tensions and natural disasters. This collaboration could also serve as a counterbalance to U.S. and Taiwanese dominance, offering an alternative hub in the Indo-Pacific [1].

According to a report by Deloitte, the global semiconductor market is projected to reach USD 627.76 billion by 2025, with regional alliances playing a pivotal role in ensuring stability [3]. India’s CAGR of 13% in semiconductor growth, coupled with Singapore’s global trade networks, positions the partnership to capture a significant share of this market [1].

Future Outlook: A Model for Geopolitical Tech Alliances

As AI and semiconductor demands surge, India and Singapore’s collaboration exemplifies how strategic alliances can enhance technological sovereignty. By combining India’s R&D capabilities with Singapore’s global connectivity, the partnership not only strengthens regional economic resilience but also challenges the status quo of global supply chains. Investors should monitor upcoming policy frameworks and joint ventures, which could redefine the Indo-Pacific’s role in the tech landscape.

Source:
[1] Competitive Analysis Report – Indian Semiconductor Sector, [https://www.mool.ai/information/conduct-a-competitive-analysis-of-a-leading-semiconductor-company-in-india-focusing-on-its-market-position-strategy-and-future-potential]
[2] Restructuring the Global Semiconductor Supply Chain, [https://www.jusdaglobal.com/en/article/global-semiconductor-supply-chain-trends-challenges-opportunities/]
[3] TMT Predictions 2025, [https://www.deloitte.com/us/en/insights/industry/technology/technology-media-and-telecom-predictions.html]