Semiconductor Industry of India
About Semiconductor:
- It is typically made of silicon, a material that conducts electricity more than an insulator like glass but less than a pure conductor like copper or aluminium.
- Semiconductors are essential parts of cutting-edge technologies such as artificial intelligence (AI) and internet of things applications, 5G communications, cloud computing, automation, and electric vehicles. These technologies have a wide range of uses, from simple, flimsy consumer electronics and vehicles to areas requiring strategic operations.
Chips for semiconductors:
- It is an electrical circuit built on a semiconductor wafer with a large number of parts, including wire and transistors.
- These semiconductor chips are one of the main factors contributing to the current globalization of the ICT industry.
- The modern information era depends on semiconductor chips.
- They make it possible for electronic items to compute and regulate actions that make lives simpler.
- An average semiconductor chip passes through 70 different hands during the production process, from sand to completed product.
Areas of Concentration:
- All electronic items are built around semiconductors. However, a few geographical areas have a majority of the manufacturing capacity for semiconductors.
- Taiwan and South Korea are the only countries having virtually all of the world’s leading edge (sub 10nm) semiconductor production capability, with Taiwan accounting for nearly 92% of this capacity.
- Furthermore, China and East Asia account for 75% of the global capacity for semiconductor production.
Possibilities for India:
- By 2026 and 2030, India’s semiconductor consumption is anticipated to surpass $80 billion and reach $110 billion, respectively.
- Up to 20% of the world’s semiconductor design engineers come from India, which has an exceptional talent pool for the field.
- India has a special opportunity during this decade. Businesses are searching for alternatives to their bases in China as well as ways to diversify their supply chains.
- A multiplier effect on the entire economy would be guaranteed by the construction of the semiconductor value chain.
- Since most of the semiconductor testing and manufacturing facilities are located in East Asia, the Act East policy offers a chance to establish and deepen relationships with important regional companies.
Problems / Challenges:
massive investment needed
- Setting up a fab manufacturing facility will cost many billions of dollars.
- Therefore, all semiconductor fabs engage in a major and expensive effort to transform raw water into water of ultrahigh purity.
electricity and water supply
- Water is used extensively in the semiconductor manufacturing process for a range of tasks, such as wafer surface cleaning and equipment cooling.
- technological aptitude
- A certain amount of technical ability is required to create a semiconductor chip.
- inadequate planning and improper waste management
- Deplorable logistics and a lack of efficient waste disposal have made the production’s poor status even worse.
- dependable sources of high-quality electricity.
Covid-19
- The start of the Covid-19 pandemic and the ensuing global lockdowns that forced the closure of major chip-making facilities in nations including Japan, South Korea, China, and the US were the trigger.
- The Covid-19 chip shortages cost the automotive industry $110 billion in lost sales in 2021.
- Ukraine-Russian conflict
- Chipmakers are now prepared to spend in bolstering the semiconductor supply chain due to the Russia-Ukraine conflict and its effects on raw material supplies for the semiconductor value chain.
India’s initiatives include:
Program for Semiconductor India
- It offers other non-fiscal measures and fiscal support of $10 billion.
- The goal of the Semicon India Program is to offer firms and consortia that work in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors, Silicon Photonics, Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT), and Semiconductor Design significant incentive support.
Mission for Indian Semiconductors:
- It has been established as an Independent Business Division within Digital India Corporation with administrative and financial autonomy to develop and advance India’s long-term strategies for expanding semiconductor manufacturing facilities, display manufacturing facilities, and the ecosystem for semiconductor design.
programme for production-linked incentives
- The PLI and DLI schemes were also recently introduced by the government as important steps in the development of the nation’s semiconductor ecosystem.
- The recent Cabinet decision for the expansion of the semiconductor and display manufacturing ecosystem, with an outlay of?76,000 crore spread over six years, is anticipated to be a boost.
- This action is expected to bring in?1.7 lakh crore in private investment to India.
Conclusion and Next Steps:
- Miniature diplomacy
- India must seize this chance to establish itself as a viable alternative location for the production of semiconductors.
- The next step is to develop an action plan for semiconductor diplomacy.
- India’s Act East Policy, which aspires to forge strong links in the Asia Pacific region, relies heavily on semiconductor diplomacy.
- Quad has enormous potential in this area and may be harnessed by strengthening multilateral and bilateral cooperation.
- Creation of Policies
- Since the semiconductor value chain is interconnected with many other industries, governments must create regulations that, over time, address all of the critical aspects.
- To guarantee a degree of global collaboration, government policies should also concentrate on ensuring and securing access to foreign technology suppliers through trade and foreign policy.
