The article begins with:
India is making strides towards becoming a significant player in the global semiconductor industry. The country’s efforts are directed towards enhancing the design, manufacturing, and innovation capacities within the electronic sector. This is substantiated by the recent inauguration of the first ever Semicon India 2022 Conference under the India Semiconductor Mission (ISM) by the Ministry of Electronics & Information Technology in Bengaluru. The conference, centered on the theme “Catalyzing India’s Semiconductor Ecosystem,” is anticipated to further the Prime Minister’s vision of positioning India as a leader in electronics manufacturing.
Understanding Semiconductors
Semiconductors are an integral component in the assembly of various electronic devices due to their unique property of conductivity, which lies intermediate between a conductor and an insulator. These crystalline solids are employed in the manufacture of diodes, transistors, integrated circuits, and more. Their widespread application stems from their compact size, reliability, power efficiency, and cost-effectiveness. In addition to these, semiconductors are utilized in the production of power devices, optical sensors, and light emitters, including solid-state lasers.
The Objective of India Semiconductor Mission (ISM)
Launched in 2021 under the guidance of the Ministry of Electronics and IT (MeitY), ISM aims to foster sustainable development in the semiconductor and display ecosystem of India. With a total financial outlay of Rs 76,000 crore, the mission seeks to provide financial support to companies investing in semiconductors, display manufacturing, and design ecosystem. The mission agency, guided by global semiconductor and display industry experts, is responsible for the efficient implementation of the schemes lined up under ISM.
Schemes under India Semiconductor Mission
Several schemes, each with different components, have been introduced under the India Semiconductor Mission. These include schemes for the establishment of Semiconductor and Display Fabs in India that offer financial assistance towards attracting substantial investments. Likewise, the Design Linked Incentive (DLI) Scheme offers financial incentives and design infrastructure support across various stages of development and deployment of semiconductor design.
Semiconductor Industry’s Significance in Modern Economics
The semiconductor industry is at the heart of modern economics. Its importance is highlighted by its omnipresent nature in an array of electronic devices like smartphones, radios, TVs, laptops, computers, and even advanced medical equipment. The advent of e-vehicles has further escalated the demand for semiconductors. Current consumer trends suggest a progressive increase in the demand for electronic gadgets, thereby emphasizing the need for early entry into the sector.
Promotion of Semiconductor Industry as Future Potential
India’s own consumption of semiconductors is expected to cross USD 80 billion by 2026 and reach USD 110 billion by 2030. With limited manufacturing countries, the global semiconductor industry is predominantly led by the United States of America, Taiwan, South Korea, Japan, and the Netherlands. An early foray into semiconductor manufacturing could potentially establish India as a significant player in the sector.
Relevant Initiatives for Semiconductor Promotion
Several initiatives have been introduced to promote semiconductor manufacturing in India. These include the modernization and commercialization of Semi-conductor Laboratory (SCL) and the approved fiscal support of 30% of capital expenditure to Compound Semiconductors units. A significant amount has also been approved under Product Linked Incentive (PLI ) schemes for Largest Scale Electronics Manufacturing, PLI for IT Hardware, SPECS Scheme, and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.
The Way Forward with Semiconductors
Being the foundation of modern electronics, semiconductors are driving the next phase of digital transformation under Industry 4.0. As India continues to aspire for self-reliance in this sector, it needs to adopt an inclusive approach, keeping key adversaries out. This could involve harnessing India’s PSEs, like Bharat Electronics Ltd or Hindustan Aeronautics Ltd, to set up a semiconductor fab foundry with the help of a global major. Most importantly, favourable trade policies will play a vital role in constructing a plurilateral semiconductor ecosystem.
