Japan-India Semiconductor Supply Chain Partnership
Context:
Recently, the Union Cabinet sanctioned a Memorandum of Cooperation (MoC) between India and Japan concerning the Japan-India Semiconductor Supply Chain Partnership.
Relevance:
GS-03 (Science and technology)
Main Highlights:
- The MoC, signed in July 2023, aligns the Ministry of Electronics and Information Technology in India with Japan’s Ministry of Economy, Trade and Industry.
- This agreement primarily aims to strengthen collaboration between the two nations to bolster the semiconductor supply chain.
- This MoC remains valid for a duration of five years from the date of its signing.
- An integral part of the Indian government’s strategy is to foster an environment conducive to electronics manufacturing within the country.
- The Ministry actively endorses international collaboration in emerging Information Technology realms, participating in bilateral and regional frameworks.
What are semiconductor chips?
- Semiconductors are materials with a conductivity between conductors and insulators.
- They can be pure elements like silicon or compounds like gallium arsenide.
- Semiconductor chips are the basic building blocks of modern electronics and information technology products.
- They are essential components in automobiles, household gadgets, and medical devices.
- The COVID-19 pandemic has increased the demand for semiconductor chips as more activities shift online.
- Shortages of semiconductor chips have caused disruptions in various industries, leading to pent-up demand and subsequent supply shortages.
Significance of Semiconductors:
- Semiconductors play a crucial role across various sectors like aerospace, automobiles, communications, clean energy, IT, and medical devices.
- High demand for semiconductors has led to a global chip shortage, impacting growth and jobs in the economy.
- To address this, the government had sanctioned ₹76,000 crore under the Production-Linked Incentive (PLI) scheme in December 2021 to encourage domestic semiconductor manufacturing.
- Semiconductors and displays are the backbone of modern electronics, driving the transition to Industry 4.0.
