Tag: Global Chip Shortage & India’s Role

Semiconductors are the backbone of modern digital technology, powering smartphones, satellites, and defense systems. To reduce import dependence, India launched the India Semiconductor Mission (ISM) in 2021 with a ₹76,000 crore outlay. This article explains the mission’s objectives, chip design ecosystem, investments, challenges, and its importance for UPSC Prelims and Mains 2025. Join Telegram :Join our Telegram group to get instant alerts and study materials on current affairs and important topics: Link Semiconductor Designers Chip In – India’s Semiconductor Push Why in News? The India Semiconductor Mission (ISM), launched in 2021 with an outlay of ₹76,000 crore, has been in focus due to major investments by Tata Electronics, Micron, and global partners. In recent years, geopolitical tensions (China–Taiwan issue, US chip export bans, global chip shortage during COVID-19) highlighted the need for India to become self-reliant in semiconductors. India has seen progress in chip design startups but faces hurdles in large-scale fabrication (fabs), prompting policy reforms and international collaborations. About Semiconductors Semiconductors are materials like silicon that conduct electricity under certain conditions. They are essential for making microchips that power smartphones, satellites, automobiles, AI, telecom, and defense systems. They form the foundation of digital technology and national security. Key Points Global Semiconductor Landscape Dominated by Taiwan (TSMC), South Korea (Samsung), and the USA (Intel, Nvidia). China is emerging as a large player, investing heavily in fabs. India’s Current Role Strong in chip design and R&D, with companies like Wipro, HCL, and startups like Tessolve contributing globally. Weak in semiconductor fabrication, which requires massive investment and infrastructure. Strategic Importance for India Reduces import dependence. Boosts Atmanirbhar Bharat vision. Ensures resilience in defense, telecom, and AI-driven industries. Join Telegram :Join our Telegram group to get instant alerts and study materials on current affairs and important topics: Link India Semiconductor Mission (ISM) – 2021 Launched by Ministry of Electronics & IT (MeitY) with ₹76,000 crore financial outlay. Objectives Long-Term Strategy: Build a sustainable semiconductor design and manufacturing ecosystem. Global Supply Chain Presence: Reduce dependence on imports of chemicals, gases, and machinery. Support to Design Startups: Provide EDA tools, foundry access, and financial support. Centers of Excellence: Promote advanced research and international collaborations. IoT & Collaborative Research: Encourage scale-based innovation and skill development. Components Scheme for Semiconductor Fabs: Financial support (up to 49% government equity) to private players for fabs. Scheme for Display Fabs: Incentives for LCD/AMOLED display units. Compound Semiconductors / ATMP / OSAT: Focus on photonics, MEMS, chip testing, assembly, and packaging. Design Linked Incentive (DLI): Support for ICs, SoCs, chipsets, and IP Cores – managed by C-DAC. Recent Developments Tata Electronics: ₹91,000+ crore investment for a semiconductor fab in Dholera, Gujarat. OSAT facility with daily capacity of 48 million units. Micron Technology: Setting up a semiconductor plant in Sanand, Gujarat (approved June 2023). Electronics Manufacturing Clusters (EMC 2.0): Large infrastructure projects in Telangana, Tamil Nadu, and Karnataka. Chips to Startup (C2S) Program: Training 85,000 engineers, developing 175 ASICs, 20 SoCs, and 30 FPGA designs in five years. AICTE Programs: New VLSI and IC manufacturing courses launched in 2023 to create skilled manpower. Progress and Impact Investments: SPECS and PLI schemes attracted ₹50,000+ crore investments. Production Growth: Mobile phone manufacturing and electronics exports surged. Talent Development: 113 institutes engaged in semiconductor R&D under C2S. Strategic Positioning: India now seen as a potential global alternative to China in electronics supply chains. Join Telegram :Join our Telegram group to get instant alerts and study materials on current affairs and important topics: Link Challenges High Capital Cost: Fabs require $3–4 billion per unit; current investment levels are insufficient. Employment Paradox: Despite huge investments, fabs generate limited direct jobs (~1,500 per fab), raising ROI concerns. Skilled Workforce Shortage: Gap in VLSI, IC design, and fabrication expertise. Industry–Academia Collaboration: India ranks low globally, leading to brain drain of talent. Insufficient R&D Spending: India ranks 56th globally in R&D expenditure (% of GDP). Policy & Investment Uncertainty: Foxconn’s withdrawal from a joint venture exposed investor hesitation. Dependence on Imports: Critical raw materials (lithium, silicon, tellurium, graphite) heavily imported, mostly from China. Environmental Concerns: Chip fabs use hazardous chemicals and large amounts of water, raising ecological issues. Way Forward Strengthen ISM Implementation: Faster approvals, predictable policies, and transparent governance. Enhance R&D: Increase public-private co-funding, reduce bureaucratic hurdles. Talent Development: Expand semiconductor-focused courses, industry internships, and skill-building programs. Raw Material Security: Diversify imports, explore domestic reserves, and build recycling capabilities. International Partnerships: Collaborate with Taiwan, Japan, and US companies for technology transfer. Green Manufacturing: Adopt eco-friendly practices to minimize environmental damage. 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Tag: Global Chip Shortage & India’s Role

India Semiconductor Mission (ISM): Chip Design, Challenges & UPSC Notes 2025

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