SEMICONDUCTOR INDUSTRY IN INDIA
Context :
In June, 2023, the Union Cabinet had approved the proposal of Micron for setting up a semiconductor unit in Sanand, Gujarat.
Construction of this unit is progressing at a rapid pace and a robust semiconductor ecosystem is emerging near the unit.
The approved three semiconductor units are:
1. Semiconductor Fab with 50,000 wfsm capacity:
Tata Electronics Private Limited (“TEPL”) will set up a semiconductor fab in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan.
Investment: This fab will be constructed in Dholera, Gujarat. Investment in this fab will be Rs.91,000 crore.
Technology partner: PSMC is renowned for its expertise in logic and memory foundry segments. PSMC has 6 semiconductor foundries in Taiwan.
Capacity: 50,000 wafer starts per month (WSPM)
Segments covered:
Power management chips for electric vehicles (EV), telecom, defence, automotive, consumer electronics, display, power electronics, etc. Power management chips are high voltage, high current applications.
2. Semiconductor ATMP unit in Assam:
Tata Semiconductor Assembly and Test Pvt Ltd (“TSAT”) will set up a semiconductor unit in Morigaon, Assam.
Investment: This unit will be set up with an investment of Rs.27,000 crore.
Technology: TSAT semiconductor is developing indigenous advanced semiconductor packaging technologies including flip chip and ISIP (integrated system in package) technologies.
Capacity: 48 million per day
Segments covered: Automotive, electric vehicles, consumer electronics, telecom, mobile phones, etc.
3. Semiconductor ATMP unit for specialized chips:
CG Power, in partnership with Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand will set up a semiconductor unit in Sanand, Gujarat.
Investment: This unit will be set up with an investment of Rs.7,600 crore.
Technology partner: Renesas is a leading semiconductor company focussed on specialised chips. It operates 12 semiconductor facilities and is an important player in microcontrollers, analog, power, and System on Chip (‘SoC)’ products.
Segments covered: The CG power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications.
Capacity: 15 million per day
Strategic importance of these units:
Within a very short time, India Semiconductor Mission has achieved four big successes. With these units, the semiconductor ecosystem will get established in India.
India already has deep capabilities in chip design. With these units, our country will develop capabilities in chip fabrication.
Advanced packaging technologies will be indigenously developed in India with today’s announcement.
Employment potential:
These units will generate direct employment of 20 thousand advanced technology jobs and about 60 thousand indirect jobs.
These units will accelerate employment creation in downstream automotive, electronics manufacturing, telecom manufacturing, industrial manufacturing, and other semiconductor consuming industries.
India’s semiconductor industry started in the 1980s with semiconductor corporations limited to a PSU established at Mohali, Punjab and DRDO & ISRO’s fab lab for their own needs. Later on this industry progressed slowly as it depends on cheaper imports from china, taiwan, singapore, hong kong and south korea. In this lecture we will be discussing the semiconductor industry potential and challenges in India.
What is Semiconductor?
It is a material product usually composed of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or aluminium.
Semiconductors are critical technological components for emerging technologies viz. artificial intelligence (AI) and internet of things applications, 5G communications, cloud computing, automation, electric vehicles, with a wide coverage of applications from basic consumable electronic gadgets and automobiles to areas of strategic operations.
Semiconductor chips
It is an electric circuit with many components such as transistors and wiring formed on a semiconductor wafer.
Semiconductor chips are the lifeblood of the modern information age.
They enable electronic products to compute and control actions that simplify lives.
The manufacturing cycle of a semiconductor chip from sand to a finished product, sees it change hands approximately 70 times across international borders.
Concentrated Areas
The semiconductor is the cornerstone of all electronic products. However, the semiconductor manufacturing capacities are concentrated in a few geographies.
Further, 75 percent of the semiconductor manufacturing capacity is concentrated in East Asia and China.
Opportunities for India
India’s consumption of semiconductors is expected to cross $80 billion by 2026 and is expected to reach $110 billion by 2030.
The current decade presents a unique opportunity to India. Companies are looking to diversify their supply chain and for alternatives to their bases in China.
The establishment of the value chain for semiconductors would ensure a multiplier effect on the entire economy.
The semiconductor manufacturing and testing bases are heavily concentrated in East Asia, the Act East policy provides an opportunity to connect and strengthen ties with key players in the region.
Challenges /Issues
Covid-19
The trigger point was the beginning of the Covid-19 pandemic and the subsequent lockdowns across the world that forced shut crucial chip-making facilities in countries including Japan, South Korea, China and the US.
The chip shortages due to Covid-19 have hit automakers with a revenue loss of $110 bn in 2021.
Russia-Ukraine conflict
Initiatives taken by india
Conclusion and Way Forward
Government policies should also focus on assuring and securing access to foreign technology suppliers through trade and foreign policy to ensure a global level of collaboration.
