GS-3 Mains : Semiconductors Industry Scope

Short Notes or Micro Notes or To the Point Notes

Question : Evaluate the government initiatives aimed at promoting indigenous semiconductor manufacturing and technological innovation.

Semiconductors and their Applications:

  • Semiconductors are materials with properties between conductors and insulators, crucial for controlling electric currents.
  • Fabrication is a complex process requiring high precision (e.g., 13.5 nm light source for photolithography).

Major Players:

  • Fabrication: Taiwan’s TSMC is the leader, with equipment from Applied Materials (US) and Lam Research (US).
  • Design Software: American firms dominate.
  • Silicon Wafers: Japan’s Shin-Etsu is a leader.
  • Intellectual Property: Mostly held by British company Arm.

India’s Status:

  • Strengths: Leading role in chip design (Bengaluru).
  • Weaknesses: Limited domestic fabrication capabilities, relies on foreign IP.

Benefits of a Strong Semiconductor Industry:

  • Computing (processors, memory chips for computers, servers, data centers).
  • Communication (cell phones, satellite systems, wireless communication systems).
  • Energy (solar cells, power management).
  • Automotive (engine control units, sensors, electric vehicles).
  • Healthcare (medical imaging, monitoring, implants).
  • Geopolitical Importance: Fabrication facilities are a national security concern for many countries.

Challenges and Issues:

  • Increased demand from AI, IoT, smartphones, etc. will stress the supply chain.
  • Trade disputes can increase costs and disrupt collaboration.
  • India lacks strong original research in chip design.

Government Initiatives:

  • India Semiconductor Mission: Aims to make India a leader and boost employment.
  • Setting up three semiconductor fabs with Rs 1.26 lakh crore investment.
  • Production Linked Incentive (PLI) scheme for the electronics sector.
  • Design Linked Incentive (DLI) scheme.
  • Chips to Startup (C2S) program.
  • Scheme for Promotion of Electronic Components and Semiconductors (SPECS).
  • Semicon India program to attract manufacturers.


  • Setting up fabs requires significant investment and expertise.
  • India seeks collaboration with like-minded nations for sustainable growth.
  • India has a talented workforce and the potential for R&D leadership.
  • A strong domestic semiconductor industry can support India’s electronics manufacturing and innovation ecosystem.


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