Japan plans to move legacy semiconductor, LCD, and battery production to India as part of its strategy to reduce dependence on China. Learn how this move boosts India’s tech sector.
Japan To Shift Legacy Semiconductor, LCD And Battery Production To India To Reduce China Dependence
In a major boost to India’s technology and manufacturing ambitions, Japan is planning to relocate parts of its legacy semiconductor, LCD, and battery production to India. The move is part of Tokyo’s long-term strategy to reduce dependence on China and diversify its supply chains under the “China+1” policy.
The development comes at a time when the global electronics industry is witnessing significant geopolitical shifts, with countries seeking secure and trusted partners for critical technology manufacturing.
Why Japan is Shifting Production
For decades, Japan has relied heavily on China as a manufacturing hub for electronic components, semiconductors, and display technologies. However, growing geopolitical tensions, rising costs, and supply chain vulnerabilities have pushed Japanese firms to seek alternatives.
India, with its large workforce, expanding infrastructure, and government-backed incentives, has emerged as a strong candidate. The Indian government’s Production-Linked Incentive (PLI) schemes for semiconductors, electronics, and batteries make it an attractive destination for Japanese manufacturers.
Focus Areas: Semiconductors, LCDs, and Batteries
According to reports, Japan will shift legacy technology production—meaning slightly older but still widely used technologies—in three critical sectors:
- Semiconductors: While Japan will continue to focus on advanced chip R&D at home, older-generation semiconductor fabrication (28nm and above) may be relocated to India to meet demand from automotive, consumer electronics, and industrial sectors.
- LCD Displays: Japan, once a global leader in LCD technology, plans to move mid-range production facilities to India, helping reduce imports and strengthening India’s electronics ecosystem.
- Battery Manufacturing: With the global electric vehicle (EV) push, battery production is crucial. Shifting part of Japan’s existing battery facilities to India will not only support India’s EV mission but also reduce reliance on Chinese battery supply chains.
Boost to India’s Tech Ecosystem
This move could be transformative for India’s ambition to become a global manufacturing hub:
- Job Creation: Thousands of skilled and semi-skilled jobs in semiconductor packaging, LCD assembly, and battery production.
- Technology Transfer: Japanese expertise in precision manufacturing could help upgrade India’s capabilities.
- Export Potential: India could emerge as a competitive supplier of chips, displays, and batteries to global markets.
- Reduced Import Dependence: Currently, India imports a large share of its electronics components from China; this shift will strengthen domestic resilience.
Geopolitical Angle: Reducing China Dependence
Japan’s move is part of a broader China+1 diversification strategy, in which companies reduce over-reliance on China by expanding operations to other countries. India, Vietnam, and Indonesia have emerged as top beneficiaries of this strategy.
By relocating production to India, Japan not only strengthens its strategic partnership with New Delhi but also ensures supply chain security in critical sectors like semiconductors and energy storage.
India-Japan Strategic Ties Growing Stronger
The relocation also reflects the growing India-Japan economic and strategic partnership. Both countries are members of the Quad alliance (alongside the U.S. and Australia), which aims to ensure a free, open, and resilient Indo-Pacific.
Japan has already invested in India’s infrastructure projects, industrial corridors, and renewable energy sector. Expanding into high-tech manufacturing will further cement this partnership.
Challenges Ahead
While the move is promising, there are challenges India must address to fully capitalize on the opportunity:
- Skilled Workforce: Training engineers and technicians for semiconductor and display manufacturing.
- Infrastructure: Ensuring uninterrupted power, clean water, and logistics for chip fabs and battery plants.
- Policy Stability: Maintaining consistent tax and regulatory policies to reassure foreign investors.
- Ecosystem Development: Building supporting industries like chemicals, wafer suppliers, and precision tools.
Conclusion
Japan’s decision to shift legacy semiconductor, LCD, and battery production to India is a significant step in reshaping the global technology supply chain. For India, it represents not just an economic opportunity but also a strategic chance to position itself as a trusted manufacturing hub in the post-China era.
If executed well, this partnership could mark a turning point for India’s tech sector, bringing it closer to its dream of becoming a global electronics and semiconductor powerhouse.