TOPIC- INDIA AS A GLOBAL SEMICONDUCTOR HUB

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THE CONTEXT: India’s Semiconductor Mission (ISM) is a government initiative launched in 2021 with a total financial outlay of Rs 76,000 crore (US$ 10 billion). The mission aims to build a vibrant semiconductor and display ecosystem in India, and to make the country a global hub for electronics manufacturing and design.

WHAT ARE SEMICONDUCTORS?

Semiconductors are a class of materials that have electrical conductivity levels between those of conductors (materials that readily allow the flow of electric current) and insulators. Semiconductors play a crucial role in modern electronics and technology, as they are the foundation of various electronic devices, including transistors, diodes, integrated circuits (ICs), and more.

CHARACTERISTICS AND SIGNIFICANCE OF SEMICONDUCTORS

1. Conductivity: Semiconductors have a conductivity that falls between that of conductors and insulators. They are not as conductive as metals but are not as resistive as insulators.
2. Energy Band Structure: The behavior of electrons in semiconductors is described using energy bands. The valence band contains electrons that are tightly bound to atoms, while the conduction band contains electrons that are free to move and carry electric current. The energy gap between these bands determines whether a material is a conductor, semiconductor, or insulator.
3. Doping: Doping is the process of intentionally introducing impurities into a semiconductor material to modify its electrical properties. Two common types of doping are n-type (adding impurities with extra electrons) and p-type (adding impurities with fewer electrons). Doping allows for the controlled manipulation of electrical conductivity.
4. Electron and Hole Mobility: In semiconductors, electrons move through the conduction band, and “holes” (absence of electrons) move through the valence band. The mobility of these charge carriers influences the semiconductor’s conductivity.
5. Thermally Generated Carriers: At higher temperatures, some electrons gain enough energy to move from the valence band to the conduction band, creating electron-hole pairs. These thermally generated carriers contribute to the material’s conductivity.
6. Semiconductor Devices: Semiconductors are the basis for electronic devices like transistors, which amplify or switch electronic signals; diodes, which allow current to flow in only one direction; and integrated circuits (ICs), which pack numerous components onto a single chip.

Semiconductors have profoundly transformed the modern world by enabling the development of electronics and technology that have become integral to daily life. The ability to control and manipulate the electrical behavior of these materials has opened up a vast array of applications and continues to drive innovation in various fields.

INDIA’S JOURNEY IN THE SEMICONDUCTOR INDUSTRY

The growth of the semiconductor industry in India is important for several reasons. First, semiconductors are essential for the production of a wide range of products, from smartphones to cars to medical devices. Second, the semiconductor industry is a high-tech industry that creates high-paying jobs. Third, the semiconductor industry is a strategic industry that can help India to reduce its dependence on imported electronics. India has the potential to become a major player in the global semiconductor industry. The country has a large pool of skilled engineers, a growing manufacturing base, and a supportive government. The ISM is a major step towards realizing India’s ambition to become a global leader in semiconductors.

INDIA’S SEMICONDUCTOR JOURNEY: A TIMELINE

1970

• The UN Development Programme (UNDP) partners with Indian institutes to build semiconductor technology capabilities.

1979

• The Central Electronics Engineering Research Institute (CEERI) is established in Pilani (Rajasthan).

1983

• The Semi-Conductors Laboratory (SCL) is established in Mohali (Punjab).

1988

• The Semiconductor Research and Development Center (SRDC) is established in Bangalore (Karnataka).

2007

• The Indian government announces a National Semiconductor Policy to boost the semiconductor industry.

2017

• The Indian government launches the Electronics Manufacturing Clusters (EMC) scheme to promote the manufacturing of electronics products in India.

2020

• The Indian government announces the India Semiconductor Mission (ISM) to make India a global hub for semiconductor design, manufacturing, and testing.

2021

• Intel announces a $10 billion investment to set up a chip manufacturing plant in India.

INDIA’S SEMICONDUCTOR MISSION- 2021

India’s semiconductor industry has been on a growth trajectory over the past few years. The government of India has shown interest in promoting domestic semiconductor manufacturing and design capabilities to reduce dependence on imports, particularly for critical electronic components.

NATIONAL POLICY ON ELECTRONICS (NPE)

The NPE aims to promote electronics manufacturing in India, which includes semiconductor manufacturing. It seeks to encourage investment in electronics manufacturing and design, along with promoting research and development in the electronics sector.

ELECTRONICS MANUFACTURING CLUSTERS (EMC)

The Indian government has been setting up Electronics Manufacturing Clusters to create an ecosystem for electronics manufacturing, which includes semiconductor fabrication units.

INVESTMENT IN RESEARCH AND DEVELOPMENT

Various research and development institutions and technology parks in India have been working on advancing semiconductor research, design, and manufacturing processes.

PUBLIC-PRIVATE PARTNERSHIPS

Partnerships between the government and industry have been forged to boost the semiconductor ecosystem in India. These collaborations aim to enhance the research and development capabilities of the country.

SEMICONDUCTOR FABS

India has been exploring opportunities to establish semiconductor fabrication (fab) units within the country. Fabs are complex and capital-intensive facilities used for manufacturing semiconductor chips.

SKILL DEVELOPMENT

The development of skilled manpower in areas related to semiconductor design and manufacturing has been a focus. Initiatives include setting up training centers and programs to nurture talent in this field.

ATTRACTING FOREIGN INVESTMENT

India has been actively seeking foreign investment and collaborations to accelerate the growth of its semiconductor industry.

NEED AND SCOPE OF PROMOTING SEMICONDUCTOR INDUSTRY

• Technological Innovation: Semiconductors are at the heart of virtually all modern technologies, from smartphones and computers to medical devices and renewable energy systems. Promoting the semiconductor industry drives technological innovation and enables the development of cutting-edge products and solutions that improve people’s lives.
• Economic Growth: The semiconductor industry is a major contributor to global economic growth. It generates substantial revenue and creates high-value jobs in various sectors, including manufacturing, design, research, software development, and more. Countries with strong semiconductor industries often experience economic diversification and increased competitiveness.
• Global Competitiveness: Countries with a robust semiconductor industry are better positioned to compete globally in the high-tech sector. These industries contribute to a nation’s technological prowess and enhance its reputation as a hub for innovation.
• National Security: Many critical infrastructure systems, including those related to defense, transportation, communication, and energy, rely on semiconductor technology. A domestic semiconductor industry can enhance a country’s self-sufficiency and reduce dependency on foreign suppliers for critical components.
• Job Creation: The semiconductor industry supports a wide range of job opportunities, from skilled labor in manufacturing to highly specialized roles in research, design, and software development. By promoting the industry, countries can create employment opportunities across various skill levels.
• Research and Development: The semiconductor industry drives significant investment in research and development (R&D). Advances in semiconductor technology often lead to breakthroughs in other scientific disciplines, further contributing to societal progress.
• Education and Skill Development: Promoting the semiconductor industry encourages investments in education and skill development. This includes training programs, academic partnerships, and initiatives to cultivate a skilled workforce capable of contributing to advanced technologies.
• Emerging Technologies: As technology evolves, new semiconductor materials, processes, and architectures are required to meet the demands of emerging fields like quantum computing, advanced sensors, and nanotechnology.

THE SIGNIFICANCE OF DOMESTIC SEMICONDUCTOR MANUFACTURING FOR INDIA

The significance of domestic semiconductor manufacturing for India is multi-faceted and extends to various sectors of the economy, technological innovation, national security, and overall development. Here are some key reasons why domestic semiconductor manufacturing is crucial for India:

• Reduce dependence on imports:India currently imports most of its semiconductors, which makes it vulnerable to supply chain disruptions and price volatility. Domestic manufacturing can help to reduce India’s dependence on imports and make the country more self-reliant in the semiconductor sector.
• Create jobs: The semiconductor industry is a high-tech industry that requires a skilled workforce. Domestic manufacturing can help to create jobs in the semiconductor sector, which can boost economic growth and development.
• Promote innovation:The semiconductor industry is a constantly evolving industry that requires innovation to stay ahead of the curve. Domestic manufacturing can help to promote innovation in the semiconductor sector, which can lead to new products and technologies that can benefit India’s economy.
• Strengthen national security:Semiconductors are essential for many critical applications, such as defense and telecommunications. Domestic manufacturing can help to strengthen India’s national security by reducing its dependence on foreign suppliers of semiconductors.
• Attract foreign investment:The semiconductor industry is a global industry, and attracting foreign investment is essential for the growth of the domestic semiconductor industry in India. Domestic manufacturing can help to attract foreign investment by creating a more favorable investment climate for semiconductor companies.

Overall, domestic semiconductor manufacturing is essential for India’s economic and technological development. It can help to reduce dependence on imports, create jobs, promote innovation, strengthen national security, and attract foreign investment.

WHY IS THERE A GLOBAL RACE TO DIVERSIFY SEMICONDUCTOR SUPPLY CHAINS?

There are a few reasons why there is a global race to diversify semiconductor supply chains.

• The COVID-19 pandemic:The COVID-19 pandemic has highlighted the vulnerability of global supply chains. The pandemic caused disruptions to the production and transportation of semiconductors, leading to shortages of chips in a wide range of industries. This has made countries realize the importance of having more diversified supply chains to reduce their vulnerability to disruptions.
• The US-China trade war:The US-China trade war has also contributed to the drive to diversify semiconductor supply chains. The trade war has led to restrictions on the export of semiconductors from China to the US, which has made the US more reliant on other countries for its supply of chips.
• The rise of China:China is emerging as a major player in the semiconductor industry. China is investing heavily in semiconductor manufacturing, and it is becoming increasingly self-sufficient in terms of its chip supply. This has led to concerns in the US and other countries that China could use its control of the semiconductor supply chain as a strategic weapon.
• The increasing demand for semiconductors: The demand for semiconductors is growing rapidly, driven by the growth of the automotive, electronics, and telecommunications industries. This increasing demand is putting a strain on the global semiconductor supply chain, and it is making it more difficult for countries to secure the chips they need.

WHAT ARE THE INITIATIVES RELATED TO SEMICONDUCTORS AT THE GLOBAL LEVEL?

The various countries and organizations have launched initiatives related to semiconductors to promote their development, manufacturing, and innovation. These initiatives aim to address challenges in the semiconductor industry, enhance supply chain resilience, and advance technology capabilities.

1. European Union: Digital Compass and Digital Europe Programme: The European Union has launched the “Digital Compass” strategy, which includes targets for semiconductor manufacturing, R&D investment, and digital skills development. The “Digital Europe Programme” aims to invest in advanced digital technologies, including semiconductors, to strengthen Europe’s technological sovereignty.
2. United States: CHIPS Act and American Jobs Plan: The “Creating Helpful Incentives to Produce Semiconductors for America Act” (CHIPS Act) proposes financial incentives to stimulate semiconductor manufacturing in the U.S. The “American Jobs Plan” includes funding for semiconductor research and development, as well as supply chain resilience.
3. China: National Integrated Circuit Industry Development Guidelines: China has launched multiple initiatives to develop its semiconductor industry, including the National Integrated Circuit Industry Development Guidelines. These initiatives emphasize indigenous chip design, manufacturing, and research.
4. Japan: Moonshot R&D Initiative and Japan’s Growth Strategy: Japan’s “Moonshot R&D Initiative” focuses on technological breakthroughs in key areas, including semiconductors. The country’s growth strategy includes support for semiconductor manufacturing and innovation.
5. Taiwan: National Development Strategy for the Semiconductor Industry: Taiwan’s government supports its semiconductor industry through various programs, including research funding, talent development, and industry collaboration.
6. Global Partnerships: Various international collaborations aim to address semiconductor challenges collectively. For example, the “Global Semiconductor Alliance” (GSA) fosters collaboration among semiconductor companies worldwide.

These initiatives represent the efforts by the countries and regions are making to enhance their semiconductor capabilities and the rapidly evolving nature of the semiconductor industry.

INDIA’S COLLABORATION WITH OTHER COUNTRIES ON SEMICONDUCTOR POLICIES

India has been collaborating with various countries on semiconductor policies and initiatives to enhance its semiconductor manufacturing and design capabilities. These collaborations aim to leverage the expertise, resources, and technology of partner countries to accelerate the growth of India’s semiconductor industry.

1. Japan: India and Japan have been working together to strengthen their semiconductor industries. The “India-Japan Semiconductor & Electronics Partnership” was launched to promote collaboration in research, development, and manufacturing in the semiconductor sector.
2. Taiwan: India and Taiwan have been exploring collaboration opportunities in semiconductor manufacturing and technology. Taiwan, being a major player in the semiconductor industry, has the potential to offer technical expertise and support.
3. United States: India has engaged in discussions with the United States on various aspects of technology and innovation, including semiconductors. Collaboration with U.S. companies and research institutions can help India access cutting-edge technology and expertise.
4. Israel: India and Israel have explored opportunities for collaboration in technology and innovation, including semiconductors. Israel’s strength in research and development could complement India’s efforts in semiconductor design and manufacturing.
5. European Union: India has engaged with the European Union on technology and innovation partnerships. Collaboration with EU member states could lead to knowledge exchange and joint research projects in the semiconductor field.
6. Singapore: India and Singapore have explored avenues for cooperation in the semiconductor industry, including knowledge sharing, joint research projects, and investment opportunities.
7. South Korea: Collaboration with South Korea has been discussed to promote technology transfer and knowledge sharing in the semiconductor sector.

These collaborations are to multiple aspects for the semiconductor industry, including research, manufacturing, skill development, and policy formulation. The goal is to leverage the strengths of partner countries to accelerate India’s semiconductor capabilities and reduce its reliance on semiconductor imports.

WHAT ARE THE CHALLENGES FOR SEMICONDUCTORS SUPPLY CHAIN BY INDIA?

• Lack of Semiconductor Fabs: One of the primary challenges for India is the absence of advanced semiconductor fabrication facilities (fabs). Fabs are complex and expensive to establish, requiring significant investments in infrastructure, technology, and expertise. Without domestic fabs, India would heavily rely on imports for its semiconductor supply.
• Technological Expertise: Developing and maintaining semiconductor manufacturing expertise requires specialized skills and knowledge. India would need to invest in training and education to ensure a skilled workforce capable of managing advanced semiconductor manufacturing processes.
• Infrastructure: Semiconductor manufacturing demands a reliable infrastructure, including clean room facilities, stable electricity supply, water resources, and efficient transportation networks. Developing and maintaining this infrastructure to global standards can be a challenge.
• Supply Chain Vulnerabilities: India’s semiconductor supply chain could be vulnerable to disruptions due to global events such as supply shortages, geopolitical tensions, and natural disasters. Diversifying suppliers and ensuring supply chain resilience is crucial.
• Intellectual Property and Patents: Semiconductor technology involves a significant amount of intellectual property and patented technology. Navigating IP rights and negotiating licensing agreements can be complex and may impact the cost and feasibility of setting up semiconductor production.
• Market Demand and Fluctuations: Predicting market demand for semiconductors accurately can be challenging due to fluctuations in technology trends, consumer preferences, and global economic conditions. Overestimating or underestimating demand could affect the viability of investments.
• Regulatory and Environmental Factors: Semiconductor manufacturing involves the use of hazardous materials and consumes energy and water. Ensuring compliance with environmental regulations while maintaining efficient production processes can be a balancing act.
• Investment and Funding: Establishing a semiconductor supply chain requires significant investments, both from the government and private sector. Securing adequate funding and managing financial risks are important factors in the success of such initiatives.

THE WAY FORWARD

ADVANTAGES OF INDIA

• Large pool of talented engineers and technicians
• Strong educational system producing skilled workforce
• Cost-effective labor compared to other semiconductor manufacturing hubs
• Favorable government policies attracting foreign investment
• Strong presence of IT and electronics industries
• Increasing domestic demand for electronics and semiconductors
• Strong network of research and development institutions

INFRASTRUCTURE DEVELOPMENT

• Establishment of semiconductor manufacturing plants
• Improvement of power supply and infrastructure facilities
• Development of specialized industrial parks for the semiconductor industry
• Collaboration with global semiconductor companies for technology transfer
• Investment in semiconductor research and development centers
• Development of semiconductor testing and assembly facilities

R&D AND INNOVATION

• Strengthen collaboration between industry, academia, and research institutions
• Investment in semiconductor research and development
• Focus on emerging technologies like Internet of Things (IoT), Artificial Intelligence (AI), and 5G
• Encourage startups and entrepreneurship in the semiconductor industry
• Promote intellectual property rights protection and innovation-friendly policies

SKILL DEVELOPMENT AND EDUCATION

• Enhance technical education and training programs focused on semiconductor industry
• Establish partnerships between industry and educational institutes
• Encourage international collaborations and exchange programs
• Foster innovation and entrepreneurship in the semiconductor field
• Provide scholarships and financial assistance for students pursuing semiconductor-related courses

GOVERNMENT SUPPORT AND POLICIES

• Simplify regulatory procedures for semiconductor manufacturing and investment
• Offer tax incentives and subsidies to attract semiconductor companies
• Create a business-friendly environment for semiconductor industry
• Develop policies promoting local manufacturing and reducing import dependence
• Collaborate with other countries and international organizations for knowledge sharing and technology transfer

COLLABORATION AND INTERNATIONAL COOPERATION

• Strengthen partnerships with leading semiconductor manufacturing countries
• Explore technology collaboration with global semiconductor giants
• Provide support to other developing countries in establishing semiconductor hubs
• Participate in international forums and conferences for knowledge sharing
• Promote export of Indian semiconductor products to global markets

ENVIRONMENTAL SUSTAINABILITY

• Promote sustainable and eco-friendly manufacturing practices
• Invest in renewable energy sources for semiconductor manufacturing
• Develop waste management and recycling systems for semiconductor industry
• Encourage research and development of energy-efficient semiconductor technologies

MARKET DEVELOPMENT

• Identify and target emerging markets for semiconductor products
• Encourage domestic manufacturing and reduce import dependency
• Develop a robust supply chain for semiconductor industry
• Strengthen indigenous semiconductor product development and manufacturing capabilities
• Foster collaborations between Indian and global semiconductor companies for market expansion

THE CONCLUSION: India has immense potential to become a global semiconductor hub and strategic investment in infrastructure, R&D, education, and government support is crucial. Collaboration and international cooperation will accelerate India’s growth in the semiconductor industry. It is focus on innovation, skill development, and sustainable practices will drive India’s success in the global semiconductor market.

UPSC MAINS QUESTION

Q.1 What are the major challenges faced by India to become a global semiconductor hub? What steps are being taken by Government of India in that direction?

Q.2 Discuss the potential and significance of India becoming the global semiconductor hub.