Semi Conductor Industry in India

Context:

Singapore is exploring new initiatives such as manufacturing of semiconductors and building a semiconductor ecosystem in India and participating in the creation of a new generation of technological solutions, the city-state’s President, Tharman Shanmugaratnam, said.

India’s semiconductor industry is growing rapidly, and the government has taken several steps to support it. The industry is expected to reach $80.3 billion by 2028.

Semiconductor

A semiconductor is a material that can conduct electricity in some conditions and block it in others. Semiconductors are used in many electronic devices, including computers, air conditioners, and medical devices. 

What are semiconductors used for?

• Semiconductors are used in integrated circuits (ICs), which are the building blocks of computer chips. 
• Semiconductors are also used in diodes and transistors. 
• Semiconductors are used in thermoelectric generators and coolers. 

India’s Semiconductor Mission

• Launched in 2021 with an investment of USD 10 billion, the Semiconductor Mission aims to reduce dependence on imports and boost national security.
• The Semiconductor Mission will generate 35,000 quality jobs and indirect employment of 100,000 people.
• Part of Semiconductor India Programme, which will establish a particular chip design center in the tech hubs of Bangalore, Hyderabad and Pune.

The Challenges: India’s Semiconductor Dream

• Infrastructure Challenges
  • The geography and development pattern across India make infrastructure a problem.
• Talent Gap
  • High-skilled and multi-domain skill-set employees require the semiconductor industry.
• Expensive Production Cost
  • A very capital-intensive process, this business is cost-prohibitive, and the operational cost.
• Global Supply Chain Dynamics
  • It has huge ramifications for the semiconductor ambitions of India if the global supply chain goes haywire on account of geopolitics or a natural disaster.
• Environmental Concerns
  • It is an energy-intensive industry, and it poses environmental concerns.
• Competition from Other Emerging Markets
  • Vietnam, Malaysia, and Indonesia are some of the other emerging markets that threaten India.
• Strengthen Semiconductor Education and Training
  • Introduce and expand semiconductor engineering curricula within colleges and technical schools
• Develop Native Chip Design Capability
  • Significantly invest in chip design capabilities that already leverage native software strengths.

Government Schemes for Semi Conductor in India

• Semicon India Programme
  • A program that provides financial support and technological collaboration to companies that invest in semiconductors and display manufacturing. 
• Design Linked Incentive (DLI) Scheme
  • A scheme that provides financial incentives and design infrastructure support for semiconductor design. 
• Modified Scheme for setting up of Semiconductor Fabs in India
  • A scheme that provides fiscal support of up to 50% of the project cost for setting up semiconductor fabs. 

Goals of these schemes

• To develop a sustainable semiconductor and display ecosystem in India. 
• To position India as a global hub for Electronics System Design and Manufacturing (ESDM). 
• To encourage domestic manufacturing of semiconductors.