A push for the semiconductor industry

#GS-03 Economy Science and Technology

For Prelims:

What are Semiconductors?

  • A semiconductor material has an electrical conductivity value falling between that of a conductor, such as iron, copper etc, and an insulator, such as rubber, ceramics etc.
  • They are commonly used in the manufacturing of IC (Integrated Circuit) chips.
  • Semiconductors can be pure elements, such as silicon or germanium, or compounds such as gallium arsenide or cadmium selenide.

 

For Mains

 

How important is the semiconductor industry?

  • Semiconductors are the building blocks of almost every modern electronic device.
  • According to the Electronics and IT Ministry, semiconductor demand in India would increase to $70-$80 billion by 2026.
  • The global semiconductor industry is currently valued at $500-$600 billion.
  • Semiconductor industry involves making chip-fabrication machines; setting up fabs or factories; and ATMP (assembly, testing, marking, and packaging).
  • Currently the major players in chip-making industry Taiwan, South Korea, and the U.S.
  • According to a New York Times estimate, 90% of 5nm (nanometre) chips are produced in Taiwan, by the Taiwan Semiconductor Manufacturing Company (TSMC).

 

What has been done by India?

  • India announced a $10 billion dollar production-linked incentive (PLI) scheme to encourage semiconductor and display manufacturing in the country in December 2021.

 

Difference between the old scheme and the new one:

  • In the previous version of the scheme, the Centre was offering to fund 30% of the project cost for 45nm to 65nm chip production, 40% for 28nm to 45nm, and 50% or half of the funding for chips 28nm or below.
  • The modified scheme provides uniform 50% fiscal support for all nodes.
  • Besides, it will provide 50% of capital expenditure for other steps of the process as well (chip design and ATMP).
  • The modified scheme also emphasised the production of the 45nm chip, which is fairly less time-consuming and economical in terms of production.