INDIA'S DEVELOPMENT IN THE FIELD OF SEMICONDUCTORS   I   RACE IAS : Best IAS Coaching institute in Lucknow I  Current Affairs


Mains General Studies:2, 3

(Indian Administration and Science and Technology)

Why in News?

  • Recently India has tied up with the US for semiconductor supplies during the 5th Commercial Dialogue 2023.


  • The agreement also aims to reduce the dependence of both India and the US on players like China and Taiwan.
  • India's next objective is to build a strong semiconductor manufacturing ecosystem.
  • To establish a collaborative mechanism to strengthen the semiconductor supply chain in the country.

Significance of this Agreement for India:

  • Under this agreement, America will help in providing semiconductor technology to India.
  • It will provide golden opportunity for trade to India.
  • It will help in identifying India as a global leader in the supply chain of electronics components.
  • The agreement will help create around 85,000 trained and production-ready workforce for the semiconductor industry.

Challenges for India:

  • Lack of heavy investors.
  • Very complex and high risk manufacturing process
  • Need for continuous investment
  • Rapidly changing technology.
  • Lack of fabrication capabilities
  • Getting minimum financial assistance from the government.
  • Lack of trained personnel.
  • Lack of infrastructure facilities
  • Lack of good chip design talent.
  • Presently government and privately owned semiconductor manufacturing units in India are located only in Mohali, Punjab.

India's Position in Semiconductors:

  • India currently imports all types of chips and the market is estimated to reach US$ 100 billion from US$ 24 billion by 2025.
  • Recently India has taken the following initiatives for domestic manufacturing of semiconductor chips:
  • The central government has allocated Rs 76,000 crore in the year 2021 for the development of 'semiconductor and display manufacturing ecosystem' and to encourage chip makers.
  • India has launched 'Scheme for Manufacturing of Electronic Components and Semiconductors' for manufacturing of semiconductors.
  • In the year 2021, the Ministry of Electronics and Information Technology launched the Design Linked Incentive Scheme to educate 20 domestic semiconductor chip makers.
  • India Semiconductor Mission was established by the Central Government with the objective of achieving self-reliance in the field of semiconductor chip production
  • This mission is designed to attract investors in the semiconductor manufacturing sector in India.
  • India will need semiconductors worth US$ 80 billion by 2026 and US$ 110 billion by 2030.
  • Gujarat the first state Gujarat is the first state to announce a policy to support the semiconductor and display manufacturing sector.
  • Under this initiative of the Central Government, the Gujarat Government was the first to announce the Semiconductor Policy in its state to attract investors in the chip manufacturing sector in Gujarat.
  • With the vision of making India a global hub of the semiconductor industry, the central government launched the India Semiconductor Mission.
  • Last year, Israel's ISMC Analog Fab announced an investment of $3 billion in Karnataka to set up a semiconductor chip manufacturing plant under the India Semiconductor Mission.
  • This was followed by an investment of $19.5 billion by Taiwanese electronics giant Foxconn and local conglomerate Vedanta.
  • Both the companies have plans to set up a manufacturing facility to make chips in India.

What is Semiconductor and where is it used?

  • Semiconductor is a chip and it is used in other electronic goods like mobile, laptop, computer, fridge, TV and washing machine and SUV car parts.

Top Semiconductors Producing Countries:

  • Taiwan, South Korea, Japan, United States and China

Way Forward:

  • The manufacturing part of these semiconductors and chips is a multistage process.
  • It involves several steps related to supply-chain network, raw material, designing, IP rights, assembly, hand work and treatment.
  • It is not possible for one country alone to initiate and deliver all this.
  • In this view, the MoU that India has signed with the US is a very positive initiative development in India's ambitions to become a global semiconductor hub.
  • There are only a few countries in the world that manufacture this chip. The United States, Taiwan, South Korea, Japan and the Netherlands are its leading producers and exporters. Therefore, India should also take maximum advantage of this opportunity.



Mains Exam Question:

Recently India has tied up with America for the supply of semiconductors. Mention the major initiatives of India in the field of semiconductor.