India’s Semiconductor Sector

Why in the news?

Recently, India Government Officials assured Taiwan of policy stability in the semiconductor sector.

India’s chip incentive plans aim to enhance all three components of the semiconductor ecosystem: packaging, assembly, and testing facilities (known as ATMP and OSAT units), as well as full-scale foundries capable of manufacturing chips.

WHAT IS A SEMICONDUCTOR?

Semiconductors are materials that have conductivity levels between those of conductors (typically metals) and non-conductors or insulators (such as ceramics).

Semiconductors are the “heart and brain” of modern electronic (ICT) products.

Semiconductor Physics:

• Band Theory:Semiconductors have a bandgap, which is the energy difference between the valence band (occupied by electrons) and the conduction band (unoccupied by electrons). When given enough energy, electrons can transition from the valence band to the conduction band.
• Doping:Semiconductors can have their electrical properties altered by doping them with impurities. N-type doping adds donor atoms (such as phosphorus) that supply additional electrons, while P-type doping incorporates acceptor atoms (like boron) that create electron deficiencies or “holes.”

Semiconductor Devices:

• Diodes:Semiconductor diodes are two-terminal devices that permit current to flow in one direction while blocking it in the reverse direction. They are commonly utilized in rectifiers, voltage regulators, and signal demodulators.
• Transistors: Transistors are three-terminal devices capable of amplifying or switching electronic signals. The most common types are bipolar junction transistors (BJTs) and field-effect transistors (FETs), which include metal-oxide-semiconductor FETs (MOSFETs) and junction FETs (JFETs).

Integrated Circuits (ICs): ICs are semiconductor devices that incorporate thousands to billions of electronic components, including transistors, diodes, and resistors, all fabricated on a single chip. They act as the fundamental building blocks of modern electronic systems.

Applications of Semiconductors:

• Electronics: Semiconductors are vital components in electronic devices like computers, smartphones, televisions, and digital cameras. They facilitate the processing, storage, and transmission of information.
• Power Electronics: Power semiconductor devices, such as diodes, thyristors, and insulated gate bipolar transistors (IGBTs), are utilized in power conversion, motor control, and renewable energy systems.
• Optoelectronics: Optoelectronic devices, including light-emitting diodes (LEDs), laser diodes, and photovoltaic cells, use semiconductors to generate, detect, or manipulate light.

Emerging Trends in Semiconductors:

• Internet of Things (IoT): The growth of IoT devices is increasing the demand for low-power, high-performance semiconductors that are ideal for wireless communication, sensing, and data processing.
• Artificial Intelligence (AI): AI applications, such as machine learning and deep learning, require specialized semiconductor chips designed for parallel processing and neural network acceleration.
• Quantum Computing: Quantum computing depends on quantum bits (qubits) implemented through semiconductor-based quantum devices. Research in this area focuses on creating quantum processors that offer exponentially greater computational power than classical computers.

SEMICONDUCTOR INDUSTRY IN INDIA :

Semiconductor consumption in India reached $21 billion in 2019, growing at a rate of 15.1%, according to the India Electronics and Semiconductor Association (IESA).

India’s foray into the semiconductor industry started in the early 1980s with the founding of Semiconductor Complex Limited (SCL) in Mohali, which signified the beginning of semiconductor manufacturing in the nation.

The semiconductor manufacturing sector in India is steadily establishing itself as a key player in the global technology arena. The opening of Intel India’s semiconductor fabrication plant in Durgapur represents a significant milestone for domestic semiconductor production. The government’s initiatives, “Make in India” and “Atmanirbhar Bharat,” are designed to decrease reliance on imports and enhance domestic manufacturing, including in the semiconductor space.

India currently relies entirely on imports for its semiconductor chips. However, the market is experiencing significant growth, expected to reach $100 billion by 2025, up from the current $24 billion.

To support and expand domestic semiconductor manufacturing, India has introduced several initiatives:

The budget estimate for the Ministry of Electronics and Information Technology (MeitY) for 2024-25 has increased by 52%, reaching Rs 21,936.9 crore, compared to the revised estimate of Rs 14,421.25 crore for 2023-24.

1. Allocation for semiconductor and display manufacturing increased to Rs 6,903 crore.
2. The government has also allocated Rs 551.75 crore for IndiaAI’s mission to boost the country’s Artificial Intelligence infrastructure.
3. The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) has been introduced to boost local manufacturing of electronic components and semiconductor devices.
4. In 2021, the Ministry of Electronics and Information Technology (MeitY) launched the Design Linked Incentive (DLI) Scheme, aiming to nurture at least 20 domestic semiconductor design

India’s demand for semiconductors is expected to surge, with consumption projected to exceed USD 80 billion by 2026 and reach USD 110 billion by 2030. These initiatives underscore India’s commitment to becoming more self-reliant in semiconductor production and meeting its growing domestic needs.

Recent announcements of the Indian Government :

1. A semiconductor fabrication plant in Dholera, Gujarat, will be set up by Tata Electronics in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp. The facility is expected to manufacture 50,000 wafers per month, with an estimated investment of Rs 91,000 crore. It will focus on producing high-performance computer chips using 28 nm technology, which will be used in applications such as electric vehicles, telecommunications, and defence.
2. A semiconductor facility in Morigaon, Assam, is set to be established by Tata Semiconductor Assembly and Test Pvt Ltd (TSAT), with an investment of Rs 27,000 crore. This plant is expected to produce an impressive 48 million chips daily, primarily serving the automotive and electric vehicle sectors.
3. A semiconductor facility in Sanand, Gujarat, will be set up by CG Power in collaboration with Japan’s Renesas Electronics Corp and Thailand’s Stars Microelectronics, involving an investment of Rs 7,600 crore. Construction of these plants is set to begin within the next 100 days.

Significance of Promotiong Semiconductor Industry :

• Economic Growth and Job Creation: The establishment of these units is expected to generate approximately 20,000 direct advanced technology jobs and around 60,000 indirect jobs, thereby stimulating growth in related sectors.
• Economic multiplier effect: The initiative is expected to bolster India’s semiconductor market, projected to reach $63 billion by 2026.
• Export potential
• Technological Independence
• Reducing import dependency: It will help reach the goal of Atmanirbhar Bharat, It will help reduce dependency, particularly from manufacturing giants like Taiwan.
• Strategic autonomy: Leverage bargaining capacity
• Innovation ecosystem: Research and Development will be improved in the country.
• Global Value Chain Participation
• Attracting investments – Boost FDIs.
• Supply chain resilience
• Technology leadership –  With the establishment of these units, India will develop its semiconductor ecosystem and indigenous advanced packaging technologies.

Help in achieving the Digital India Initiative objective.

Challenges for India :

• Research and Development: India currently lags in original research in semiconductor design, which is crucial for determining the future of chip technology.
• Supply Chain: A robust supply chain is essential for semiconductor manufacturing. India needs to develop a comprehensive ecosystem that encompasses raw materials, equipment, and logistics support.
• Skilled Workforce: India must invest in education and training programs to bridge the skills gap and meet industry needs.
• Financial Constraints: Semiconductor manufacturing is capital-intensive, with substantial costs involved in setting up fabs and acquiring advanced technology.
• Policy Implementation: While initiatives like “Make in India” and “Atmanirbhar Bharat” exist, effective implementation and coordination among various stakeholders are necessary to drive progress.
• Access to Technology: Acquiring cutting-edge semiconductor manufacturing technology can be challenging, as it often involves partnerships with foreign companies

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