India’s Semiconductor Mission

13.08.2025

India’s Semiconductor Mission

Context
India approved four more semiconductor units under the India Semiconductor Mission, aiming to boost domestic chip production, cut import reliance, and launch its first fully indigenous chip by late 2025.

Key Details of Newly Approved Semiconductor Units
 

• Proposed Locations:
   
  • Two units in Bhubaneswar, Odisha.
     
  • One facility in Mohali, Punjab.
     
  • One plant in Andhra Pradesh.
    
     

Semiconductors

A semiconductor is a material whose ability to conduct electricity lies between a conductor and an insulator, and can be controlled for use in electronic devices.

Often referred to as the “brains” of modern electronics, semiconductors are integral to devices ranging from smartphones and laptops to electric vehicles, satellites, and medical instruments.

• Primary Materials: Silicon and Germanium.
   
• Additional Compounds: Gallium Arsenide, Cadmium Selenide (earlier imported largely from China).
   
• Major Applications: Aerospace, automotive electronics, telecommunications, clean energy systems, IT hardware, and healthcare equipment.
   
• Current Import Sources: China (around one-third of total), Hong Kong, Japan, South Korea, Singapore, Taiwan, and the USA.
   

Policy and Incentive Framework

• Production Linked Incentive (PLI) Scheme: Financial rewards for scaling up semiconductor production in India.
   
• Design Linked Incentive (DLI) Scheme: Support for research, design, and innovation in chip technology.
   

ETypes of Electrical Materials

• Conductors: Permit easy flow of electric current due to low resistance (e.g., copper, aluminium).
   
• Insulators: Prevent current flow; high resistance materials (e.g., rubber, mica, paper).
   
• Semiconductors: Possess intermediate conductivity that can be regulated (e.g., silicon, germanium), making them indispensable for modern electronics.
   

Challenges

• Partial Fund Utilisation: Allocated funds often remain underused. For instance, of ₹200 crore allocated in 2023, only ₹13 crore was spent; similarly, of ₹3,000 crore in 2024, utilisation was just ₹681 crore.
   
• Weak R&D Base: India’s research spending is significantly lower than global leaders such as the USA and China.
   
• Insufficient Long-term Capital: Fabrication plants require sustained investment over 5–7 years, which remains limited.
   
• Skill Gaps: Shortage of trained chip engineers and researchers, leading to talent migration abroad.
   
• Geopolitical Pressures: Global chip supply tensions, such as the US–China technology conflict, underline the need for indigenous capability.
   

Wayforward

• Expand and accelerate capital investment.
   
• Strengthen R&D infrastructure and collaborations.
   
• Develop large-scale training modules in institutions like IITs, NITs, and IIITs to produce an industry-ready workforce.

Conclusion

India’s Semiconductor Mission is pivotal for reducing import dependence, fostering innovation, and achieving chip self-reliance. Strategic investments, robust R&D, and skilled manpower will be essential to position India as a global semiconductor manufacturing hub.