A push for the semiconductor industry
#GS-03 Economy Science and Technology
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.
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.