{"id":28575,"date":"2024-08-30T19:05:37","date_gmt":"2024-08-30T13:35:37","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=28575"},"modified":"2024-09-05T15:26:21","modified_gmt":"2024-09-05T09:56:21","slug":"15-bn-push-for-phase-2-of-semiconductors-manufacturing-policy","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/30-08-2024\/15-bn-push-for-phase-2-of-semiconductors-manufacturing-policy","title":{"rendered":"$15-Bn Push for Phase 2 of Semiconductors Manufacturing Policy\u00a0"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/science and Technology<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India ramps up its semiconductor ambitions with a <strong>$15-billion<\/strong> incentive to emerge as a global chip hub, following in the footsteps of the US, Taiwan, and South Korea.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The revised blueprint focuses on capital support for raw materials, gases, and chemicals essential for chip fabrication.\u00a0<\/li>\n\n\n\n<li>However, the capex subsidy for assembly and testing plants, which had been raised to <strong>50 percent,<\/strong> can be reduced under the new plan.<\/li>\n\n\n\n<li>In March 2024, the government approved proposals to set up <strong>three semiconductor units <\/strong>in <strong>Gujarat and Assam<\/strong> with an estimated investment of <strong>Rs 1.26 lakh crore.<\/strong><\/li>\n\n\n\n<li>Now the government is <strong>looking at advanced fabrication technologies <\/strong>and <strong>micro-LED displays<\/strong>, signaling a shift towards more complex elements of the chip ecosystem.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>What is a Semiconductor?<\/strong><br>&#8211; Semiconductors also referred to as \u2018chips\u2019 are highly complex products to design and manufacture, providing the essential functionality for electronic devices to process, store and transmit data.<br>&#8211; The chip comprises interconnections of <strong>transistors, diodes, capacitors<\/strong> and <strong>resistors<\/strong>, layered on a wafer sheet of silicon.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Earlier policy<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the first iteration of the incentive policy, which was released in <strong>2021<\/strong>, the Union\u00a0 government had offered a<strong> 30 per cent capex subsidy<\/strong> for chip packaging and testing plants.\u00a0<\/li>\n\n\n\n<li>However, in 2022, it had increased the subsidy for such plants to <strong>50 per cent.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Global Scenario in Chip Manufacturing<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>About <strong>70%<\/strong> of the current global manufacturing capacity is confined to <strong>South Korea, Taiwan and China,<\/strong> with <strong>the US<\/strong> and <strong>Japan<\/strong> making up for much of the rest.<\/li>\n\n\n\n<li>Taiwan and South Korea make up about <strong>80%<\/strong> of the global foundry base for chips.<\/li>\n\n\n\n<li>Only one company, the Netherlands-based ASML, produces EUV (extreme ultraviolet lithography) devices, without which it is not possible to make an advanced chip.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges faced by India&#8217;s semiconductor industry<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India\u2019s close allies<\/strong>, like the US and EU, also sense the semiconductor opportunity and have rolled out more lucrative incentive schemes than India.<\/li>\n\n\n\n<li><strong>Talent pool:<\/strong> While India is the biggest back office for design engineers of all major chip companies, skilled talent that can work on factory floors of a fabrication plant is still hard to come by.\n<ul class=\"wp-block-list\">\n<li>Micron Technology\u2019s ATMP <strong>plant in Gujarat\u2019s Sanand is running 133 days behind schedule<\/strong>, due to the company\u2019s inability to hire sufficient construction headcount.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Research and Development:<\/strong> India currently lacks original research in semiconductor design, where the future of the chip is decided.<\/li>\n\n\n\n<li><strong>Power supply: <\/strong>An uninterrupted supply of power is central to the process, with just seconds of fluctuations or spikes causing millions in losses.<\/li>\n\n\n\n<li><strong>Water intensive: <\/strong>Chip-making requires gallons of ultrapure water in a single day.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Significance of the project<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Job Creation:<\/strong> Semiconductor manufacturing facilities in India will create many direct and indirect employment opportunities.<\/li>\n\n\n\n<li><strong>Reduced Dependence on Imports: <\/strong>India currently relies on imported semiconductor chips for various electronic devices.\n<ul class=\"wp-block-list\">\n<li>Establishing a domestic semiconductor industry will enhance the country&#8217;s self-reliance and resilience in times of geopolitical tensions or disruptions in global supply chains.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Export Opportunities:<\/strong> With a competitive semiconductor industry, India can export chips and related products to other countries, generating revenue and improving its trade balance.<\/li>\n\n\n\n<li><strong>Strategic Importance: <\/strong>Semiconductor chips are critical components in various strategic sectors such as defense, aerospace, and telecommunications.\n<ul class=\"wp-block-list\">\n<li>Having a domestic semiconductor industry ensures greater control over the supply chain and reduces vulnerabilities to disruptions or external pressures.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Other Initiatives for Semiconductor Industry<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India Semiconductor Mission: <\/strong>It has been set up as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to formulate and drive India\u2019s long-term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem.\u00a0<\/li>\n\n\n\n<li><strong>Production Linked Incentive scheme: <\/strong>Incentives are being provided for semiconductor design and packaging.<\/li>\n\n\n\n<li><strong>QUAD Semiconductor Supply Chain Initiatives: <\/strong>To assess the capacity, pinpoint vulnerabilities, and enhance supply chain security for semiconductor and its critical components.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>By establishing the semiconductor industries, India can increase its influence in the global technology landscape.\u00a0<\/li>\n\n\n\n<li>India can also attract foreign investment, foster innovation, and stimulate other sectors such as electronics, telecommunications, and information technology. A robust industry will\u00a0 significantly contribute to India&#8217;s GDP growth.\u00a0<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/in-new-chip-push-centre-ready-with-15-bn-blueprint-9540685\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India ramps up its semiconductor ambitions with a $15-billion incentive to emerge as a global chip hub, following in the footsteps of the US, Taiwan, and South Korea.\u00a0<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-28575","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=28575"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28575\/revisions"}],"predecessor-version":[{"id":28576,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28575\/revisions\/28576"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=28575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=28575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=28575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}