General Electric announced Thursday that its aviation business plans to produce jet engines for Indian fighter jets with a local partner in India. GE stock extended its decline Friday.
The GE deal had been expected. It comes during Indian Prime Minister Narendra Modi's state visit to the U.S. More deals followed, with at least three focused on strengthening global semiconductor supply chains. Concerns about China have grown in both countries.
"The agreement includes the potential joint production of GE Aerospace's F414 engines in India," GE said in a news release Thursday.
That is significant: GE would be making military jet engines in India for the first time. It already makes marine engines and commercial jet engines in that country. GE has partnered with the Indian Air Force since around 1986, supplying it with F404 and F414 engines.
"This trailblazing initiative to manufacture F-414 engines in India — the first of its kind — will enable greater transfer of U.S. jet engine technology than ever before," the White House said in a fact sheet.
The U.S. rarely shares sensitive defense technologies with non-allies like India. It remains to be seen how much of the F414 technology will be shared.
Also on Thursday, Micron Technology announced that it will invest $825 million in a new chip assembly and testing facility in the Indian state of Gujarat. Total investment, including government support, is expected to reach $2.75 billion, the memory-chip maker said.
Applied Materials announced a new facility in India to develop and commercialize technologies for semiconductor manufacturing equipment. It will invest $400 million over four years to build the new center in Bangalore, a city in southern India.
Lam Research announced a program to educate up to 60,000 Indian engineers in semiconductor nanotechnologies over 10 years.
GE Stock, Chip Stocks
Shares of GE fell 1% to 103.78 on the stock market today after easing 0.2% Thursday. GE stock has pulled back close to its 50-day moving average after a huge rally year to date. The stock has also closed very tight over the past three weeks, producing a possible follow-on buy pattern.
Semiconductor stocks traded broadly lower Friday. Shares of Micron, Applied Materials and Lam Research all declined.
Modi Visit To U.S.: Deals In Focus
India Prime Minister Modi's state visit comes as the U.S. looks to counter China's influence by broadening alliances with other Asian countries. Efforts to diversify semiconductor supply chains are a big focus amid the Chinese threat to Taiwan, which dominates the global chip industry.
Business leaders have also queued up to meet Modi, the leader of the world's most populous country.
Tesla CEO Elon Musk met with the prime minister Tuesday in New York City. He later hinted at a Tesla assembly plant in the country.
Modi has a business-friendly reputation and implemented a "Make In India" policy.
Critics accuse him of failing to stop the killings of more than 1,000 people, mostly minority Muslims, during 2002 riots in Gujarat, when he led that state. They also accuse him of engendering an increasingly illiberal democracy, although he continues to enjoy broad popularity.
