Why in the
News?
‘Semicon India 2023’ conclave has
been held in Gujarat, in which the US firm Advanced Micro Devices announced
plans to invest $400million in the country over the next five years.
Potential of
Indian Semiconductor Industry:
1. The Electronic
Manufacturing sector has grown from $30 billion to over $100 billion.
2. India has more
than 200 mobile manufacturing units.
3. Domestic
semiconductor consumption is expected to reach $80 billion by 2026.
Facilitating factors for the growth of the industry:
Efforts taken
to enable the growth of the industry:
1. India’s
Semiconductor Mission:
a. Under the
Ministry of Electronics and Information Technology.
b. To make India
as a global hub for electronics, chip manufacturing and design.
c. Launched as
part of ‘Make in India’ Initiative.
d. The mission
proposes a $10 billion incentive plan with a fiscal outlay of up to 50% of a
project’s cost to display and semiconductor fabricators.
e. Four Schemes
under the Mission
i.
Semiconductor Fab Scheme – A fiscal support
of up to % of project cost on projects appraised by the Expenditure Finance
Committee.
ii.
Display Fab Scheme - A fiscal support of up
to % of project cost on projects appraised by the Expenditure Finance
Committee.
iii.
Semiconductor and Semiconductor ATMP - fiscal support of 50% of capital
expenditure to Compound Semiconductors / Silicon Photonics / Sensors (including
MEMS) Fabs and Semiconductor Packaging (ATMP / OSAT) units.
iv. Design Linked Incentive Scheme - offer financial incentives and design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s) over a period of 5 years.
Challenges
faced by the sector:
1) Shortage of
water and energy requirements.
· With ever increasing population and increased
strain on water resources, access to water by semi-conductor industries will be
a challenging one.
· Power outages and coal shortages remains a
concern until they are offset by adoption of renewable energy to expand the
power grid as the sector requires electric
supply available 24X7, uninterrupted, 365 days a year, except for the scheduled
maintenance.
2) Need for
Critical materials as raw materials for the semiconductor industry, as India
either needs to import them or invest in domestic mining.
a) India meets its
current raw material requirements imports from China constituting 40%.
b) Domestic mining
shall take considerable time and financial investments.
3) Requirement of
vast stretches of land protected from natural disasters such as Earthquakes.
4) Shortage of
Skilled workforce apart from design engineers who are trained in Device physics
and process technology required for fabricating and manufacturing chips.
5) Building a
robust ecosystem because fabs require
a variety of high-purity gases and wafers to fabricate the chips.
6) Other Potential competitors for India:
a) China – has considerable resources and political will
b) Taiwan – It holds a virtual monopoly in the global chip
manufacturing industry responsible for 60% of the global production.
c) Vietnam, USA and South Korea are also potential
competitors.
Concerted efforts with right policy
implementation and resource facilitation shall enable India to emerge as a
global hub for semiconductors manufacturing industry.
