India’s First indigenous Semiconductor Chip to be Ready by 2025

Syllabus: GS3/ S&T

In Context

• Union Minister for Electronics and IT announced at the Global Investors Summit 2025 in Bhopal that India’s first indigenously developed semiconductor chip will be ready for production by 2025.

About 

• Semiconductors: Semiconductors are materials that have conductivity between a conductor and an insulator. They are the foundation of modern electronics, used in:
  • Computers and smartphones
  • Automobiles and electric vehicles (EVs)
  • Defense and aerospace technology
  • Medical devices
  • Telecommunication and AI applications
• Importance: India is one of the largest consumers of semiconductors but imports 100% of its requirements.
  • The launch of an indigenous semiconductor chip in 2025 will:
    • Reduce import dependence (India imports $24 billion worth of semiconductors annually).
    • Strengthen national security (used in defense and critical infrastructure).
    • Boost Make in India and Atmanirbhar Bharat initiatives.
    • Create high-skilled jobs in semiconductor design and manufacturing.

Initiatives to Develop the Semiconductor Industry

• India Semiconductor Mission (ISM) (2021): A ₹76,000 crore incentive scheme aimed at:
  • Setting up semiconductor fabrication units (fabs) in India.
  • Encouraging global semiconductor firms to invest in India.
  •  Developing design-linked incentive (DLI) schemes to support local start-ups.
• Production-Linked Incentive (PLI) Scheme for Electronics Manufacturing
• Semiconductor Manufacturing Ecosystem: Five semiconductor units under construction in India.
• Strategic Partnerships: Collaboration under India-U.S. Initiative on Critical and Emerging Technology (iCET).
  • Talks on setting up chip manufacturing units in India.
• Role in the QUAD Group: QUAD (India, US, Japan, Australia) is focusing on semiconductor supply chain resilience.

Challenges in India’s Semiconductor Sector

• Lack of Existing Semiconductor Fabs: No existing commercial fab in India yet (first expected in 2025).
• Dependence on Global Supply Chains: Taiwan, South Korea, and the U.S. dominate semiconductor manufacturing.
• High Capital and Technological Requirements: Semiconductor manufacturing requires precision, specialized labor, and high investment.
• Geopolitical Risks: US-China trade war & Taiwan tensions impact semiconductor availability. 

Future Prospects and Way Forward

• Achieving Self-Sufficiency: The government must ensure faster implementation of semiconductor plants.
• Strengthening Infrastructure: Improve power supply, water availability, and logistics for fabs.
• Enhancing Skill Development: Establish semiconductor training institutes in partnership with global leaders.
• Reducing Import Dependence: Promote local semiconductor startups under the Design-Linked Incentive (DLI) scheme.

Source: HT