Indian Council of World Affairs

ABSTRACT: The India and South Korea semiconductor partnership reflects a strategic alignment in response to the US-China technological rivalry. As semiconductors emerge as the focal point of geopolitical tensions, both countries are seeking to advance technological self-reliance, enhance supply chain resilience, and foster regional stability. Through policy alignment, investing in research, capacity building and leveraging complementary strengths, India and South Korea are laying the groundwork for a robust semiconductor ecosystem in the Indo- Pacific.

1.  THE US-CHINA CHIP WAR

The ongoing U.S.-China Chip war, triggered by U.S. restrictions on China’s access to advanced semiconductor technology since 2019, has significantly disrupted global supply chains and intensified geopolitical tensions in critical sectors such as AI, 5G, and defence. In response, China launched initiatives like “Made in China 2025” [i] the 863 programme, and the “Big fund”. Yet Chinese firms like Semiconductor Manufacturing International Corporation (SMIC) continue to rely on foreign technologies like Advanced Semiconductor Materials Lithography (ASML) from Netherlands and U.S.- origin Electronic Design Automation (EDA) software. This rivalry has triggered considerable uncertainty and risk for countries dependent on semiconductor manufacturing and trade pushing them to re-evaluate their strategies to mitigate vulnerabilities and secure more diversified ecosystems.

2.  IMPACT ON SOUTH KOREA AND INDIA: SUBSEQUENT COLLABORATION

The intensifying U.S.–China technological rivalry, particularly in the semiconductor sector, has also compelled countries like India and South Korea to recalibrate their industrial strategies.

South Korea, with major global players such as Samsung and SK Hynix, is a key node in the global semiconductor supply chain—producing over 70% of DRAM (DYNAMIC RANDOM ACCESS MEMORY) and more than half of NAND (NOT AND) flash memory[ii], However growing geopolitical pressures and supply chain vulnerabilities have prompted South Korea to intensify efforts to secure and diversify its semiconductor production capabilities.

In response to geopolitical pressures, Seoul is doubling down on domestic production and technological leadership. South Korea launched the $450 billion “K-Semiconductor Belt” initiative in 2021 to strengthen domestic production and lead in next-generation chip technologies, including high-bandwidth memory for AI applications[iii]. They are also offering tax incentives and infrastructure support to domestic and foreign firms investing in semiconductor R&D and production in South Korea.

India, while still in the early stages of semiconductor manufacturing, is leveraging current supply chain disruptions to position itself as a competitive alternative in the global value chain. The $10 billion Semicon programme of India reflects strong policy support from the government.

U.S. -based companies like Micron technology and AMD have announced investments in India, indicating international interest[iv]. Indian multinational Tata group also plans to set up chip fabrication units in Gujarat[v]. However, India continues to face challenges such as inadequate infrastructure, talent shortages, and delayed project execution.

Amid these shifts, India and South Korea are aligning their interests to build resilient and diversified semiconductor supply chains through bilateral cooperation. South Korea seeks politically stable, technologically aspiring partners and India stands to benefit from South Korean investment and expertise. Their cooperation in areas such as chip design, packaging, and display technologies signals a shared strategic vision.

This emerging partnership underscores the broader Indo-Pacific shift toward secure, China-resilient, and high-end technological ecosystems laying the groundwork for future-ready semiconductor collaboration.

India’s proactive semiconductor policies, particularly Gujarat’s semiconductor strategy launched in August 2022, attracted serious international interest. Building on this momentum, Vedanta signed MoUs in April 2023 with 20 Korean display glass firms for the development of an electronics manufacturing hub in India[vi].

Institutional momentum was then marked by the September 2023 MoU between the India Electronics and Semiconductor Association (IESA) and the Korea Display Industry Association (KDIA)[vii]. This agreement focused on joint R&D, display technologies, workforce development, and technical exchange.

Additionally, collaborations are emerging through India’s Semiconductor Mission and R&D initiatives, as well as South Korea’s K-CHIPS Act, passed by the National Assembly in February 2025[viii]. These substantial investments are reinforcing collaboration in building a resilient semiconductor ecosystem[ix].

The 3rd Korea–India Future Economy and Industry Forum, co-hosted by the Korea Institute for International Economic Policy (KIEP) and Ernst & Young in New Delhi on June 5, 2025, further underlined how Korea’s chipmaking leadership and India’s digital infrastructure can together power next-generation innovation[x].

LG electronics is reported to have begun work on a Rs 5000 crore plant city, Andhra Pradesh, in May 2025, to produce consumer electronics, supported by Korean component suppliers[xi]. SK Hynix was also reportedly evaluating India’s semiconductor incentive schemes, particularly in packaging and testing[xii]. Korean firms are showing interest in Gujarat for semiconductor parts and R&D. This reflects the growing interest in deepening strategic and economic ties between India and South Korea in the semiconductor sector[xiii].

For South Korea, India offers a stable, investment-friendly destination with a growing consumer base, skilled manpower, and government-backed infrastructure support under the India Semiconductor Mission. India, in turn, benefits from Korea’s technological expertise, capital, and ecosystem-building capabilities. Initiatives like the “Chips-to-Startup” programme – initiated by the Ministry of the Electronics and Information Technology (MeitY), Government of India, and aimed at training 85,000 semiconductor professionals – are ripe potential areas for support by South Korean firms through internships and skill development[xiv].

CONCLUSION

India and South Korea’s semiconductor partnership represents more than economic alignment; it is a strategic convergence of two innovation hubs advancing a shared vision for technological self-reliance, industrial collaboration and regional stability in the semiconductor sector.

Combining India’s semiconductor policies with South Korea’s manufacturing strength, both countries are laying a strong base for technological progress. This deepening cooperation will help to promote regional stability and shared growth between India and South Korea to strengthen this partnership, both sides should focus on joint research, ease regulations, and train skilled workers for long-term success.

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*Kushubu kumari Yadav, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal. 

Endnotes

[i] ORF Asia, n.d., Made in China 2025: Ambitions, Challenges, and Implications, available at: https://orcasia.org/made-in-china-2025

[ii] SSRN, “India–South Korea Semiconductor Collaboration: A Strategic Pathway to Technological Resilience and Supply Chain Diversification,” available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4854445

[iii] KBS WORLD, ““K‑Semiconductor Belt Strategy” to Establish the World’s Largest Supply Network by 2030,” KBS WORLD, published May 17, 2021, available at: https://world.kbs.co.kr/service/contents_view.htm?board_seq=403357.

[iv] Kumarasamy, D., and Jain, V., “India–South Korea CEPA 2.0: Potentials and Opportunities for Supply Chain Integration,” Journal of Social and Economic Development, 2025, available at: https://doi.org/10.1007/s40847-025-00452-x

[v] India Briefing, Melissa Cyrill & Yashoda Kapur, “Setting Up a Semiconductor Fabrication Plant in India: What Foreign Investors Should Know,” India Briefing, June 3, 2025, available at: https://www.india-briefing.com/news/setting-up-a-semiconductor-fabrication-plant-in-india-what-foreign-investors-should-know-22009.html

[vi] The Hindu BusinessLine, “Vedanta signs MoU with 20 Korean companies for display glass business,” BusinessLine, April 17, 2023, available at: https://www.thehindubusinessline.com/companies/vedanta-signs-mou-with-20-korean-companies-for-display-glass-biz/article66747746.ece

[vii] India Electronics & Semiconductor Association, “India Electronics and Semiconductor Association (IESA) Signs MoU with Korea Display Industry Association (KDIA),” CXOToday, published September 15, 2023, available at: https://cxotoday.com/press-release/india-electronics-and-semiconductor-association-iesa-signs-mou-with-korea-display-industry-association-kdia/

[viii] Chosun biz , “K-Chips Act Passes National Assembly, Increasing Semiconductor Tax Credit Rates,” available at: https://biz.chosun.com/en/en-policy/2025/02/27/FZ5DBVBG25CR7A2BUUXWKVVCBU/

[ix] Kim & Chang, “Enactment of the K‑Chips Act – Government’s Support and Regulatory Policies for the Semiconductor Industry,” Kim & Chang Insights, May 22, 2023, available at: https://www.kimchang.com/en/insights/detail.kc?sch_section=4&idx=27331

[x] Asian Community News, “Korea‑India Forge Strategic Semiconductor Alliance at 3rd Future Economy & Industry Forum,” Asian Community News, published June 9, 2025, reporting on the high‑level Korea‑India Economic Policy forum in New Delhi, available at: https://www.asiancommunitynews.com/korea-india-forge-strategic-semiconductor-alliance-at-3rd-future-economy-industry-forum/

[xi] Times of India, “LG begins work on massive Rs 5,000‑crore plant in Andhra’s Sri City,” Times of India, May 9, 2025, available at: https://timesofindia.indiatimes.com/business/india-business/lg-begins-work-on-massive-rs-5000-crore-plant-in-andhras-sri-city/articleshow/121028818.cms

[xii] The Indian Express, “South Korea’s SK Hynix looking to set up chip packaging plant in India,” available at:
https://indianexpress.com/article/business/semiconductor-manufacturing-in-india-south-korean-chipmaker-sk-hynix-8828128/

[xiii] Department of Science & Technology–Gujarat, Gujarat Semiconductor Policy 2022–27, July 2022, available at: https://dst.gujarat.gov.in/Home/GujaratSemiconductorPolicy

[xiv] MeitY, Chips to Startup (C2S) Programme, available at: https://www.c2s.gov.in/