IAS Gyan

Daily News Analysis

Semiconductors

13th August, 2021 Science and Technology

Context

  • ‌Mumbai-based conglomerate Tata Group, is now planning to get into semiconductor manufacturing.

About

  • ‌Currently, the world is experiencing a shortage of chips and semiconductors that have become essential not only f or new-age technological products like smartphones and computers, but also for traditional sectors like automobiles.
  • ‌In places like South Korea and Taiwan being shut down. 
  • ‌This has created pent-up demand that these foundries were unable to satisfy after opening up.

Semiconductors in India 

  • ‌India imports 100% of its semiconductors while also enjoying the distinct advantage as a leading global semiconductor chip designer.
  • ‌There have been challenges in setting up of Semiconductor Wafer Fabrication (FAB) units in India. 
  • ‌India is still not unto the par in terms of the basic infrastructure needed.
  • ‌There is also constant price pressure from other global players, particularly China.

Prospects

  • ‌With the newly heralded era of Internet of Things (IoT) dictating that the new generation of interconnected devices be capable of smart-computing, Indian semiconductor industry is set for a stable upsurge with bright prospects provided India's generic obstacles like redtape-ism, fund crunch and infrastructural deficits are adequately addressed.
  • ‌In 2016, the government allows 100% FDI in the ESDM sector through an automatic route to attract investments including from Original Equipment Manufacturers (OEMs) and Integrated Device Manufacturers (IDMs).
  • ‌The Department of Electronics and Information Technology (DeitY) has established an Electronics Development Fund (EDF) managed by Canara Bank to provide risk capital and to attract venture funds, angel funds and seed funds for incubating R&D and fostering the innovative environment in the sector.
  • ‌Some of the initiatives outlined in the National Electronics policy and the National Telecom policy are already in the process of implementation, such as Preferential Market Access (PMS), Electronics Manufacturing Clusters (EMC) and Modified Special Incentive Package Scheme (M-SIPS). 
  • ‌With the implementation of fabrication capabilities in India, the country could achieve a degree of self-sufficiency in the sector of semiconductors.

 

https://indianexpress.com/article/explained/tata-group-semiconductor-manufacturing-computer-chip-shortage-tejas-networks-7450091/