Quad seeks to rejig supply chain and secure telecom ecosystem

The Quad Alliance – India, US, Japan, and Australia – has joined hands to secure supply chains in critical areas such as semiconductors and 5G telecom technologies, in a bid to contain the rising influence of China in these strategic sectors, according to geopolitical experts.

“Resilient, diverse and secure technology supply chains – for hardware, software and services – are vital to our shared national interests,” the US said in a statement during the first-ever in-person summit of Quad leaders in Washington on Friday.

Prime Minister Narendra Modi joined US President Joe Biden, Japanese Prime Minister Yoshihide Suga and Australian Prime Minister Scott Morrison in calling for “close cooperation on supply chains with allies and partners who share our values” with an aim to enhancing “security and prosperity” of the four partner nations and to “strengthen capacity to respond to international disasters and emergencies”.

Several nations, including China, Japan and the US, are racing to build significant domestic capacity. India, for the third time in two decades, is attempting to build local semiconductor manufacturing capabilities by offering incentives to global firms to set up fabrication units in the country that can be used to supply silicon chips both to the local market as well as become a base for global supplies.

“This (the Quad agreement) is very positive for India. Multilateral cooperation on semiconductors is the only way, as self-sufficiency has not yielded results,” said Pranay Kotasthane, who specialises in high-tech geopolitics as deputy director at The Takshashila Institution, a Bengaluru-based think tank.

Modi, who met Qualcomm CEO Cristiano Amon in Washington DC this week, asked the American company to step up its India investments in areas such as chips used in 5G telecom networks. Globally, Taiwan dominates the worldwide semiconductor manufacturing arena. Taiwan Semiconductor Manufacturing Co, its flagship company, is also the world’s largest producer for over half of the globe’s semiconductor requirements including advanced 5 nanometer chips. It plans to make 3 nanometer chips later this year.

The Quad’s focus on securing high-tech supply chains is also due to this global dependency on Taiwan, which has a strained relationship with China, Kotasthane said. “China has been violating Taiwanese air space and there have been cyber-attacks on Taiwan. These are risks and it can lead to supply chain bottlenecks. We already see it in the automotive industry. Collectively, Quad wants to rejig the supply chain and ensure the adversary doesn’t have key controls of the supply chain,” he said.

Quad framework
The four leaders have also jointly agreed on a framework of Quad principles that will drive the future of technology design, development, governance, and use. The Quad is also focused on fostering and promoting a diverse, resilient, and secure telecommunications ecosystem, it said. VNExplorer