Semiconductor fab: the unfinished agenda

Context The government’s 2022 Semiconductor Mission is laudable. But there is still uncertainty about whether India will have a fabrication plant. In this context, it is important to understand why earlier attempts failed and examine alternate approaches. Earlier attempts
  • Special Incentive Package- The first serious attempt was made in 2007 in the form of a Special Incentive Package (SIP), but it yielded no response.
  • Modified SIP- The second attempt in the form of Modified SIP in 2012 fared better.
  • Two consortia- Two consortia were approved by the Cabinet with an attractive set of incentives. But finally, both failed to mobilise resources.
Challenges in constructing semiconductor Fabrication
  • Investment- Investment in a semiconductor fab is one of the riskiest. Billions of dollars need to be recovered before the technology becomes obsolete.
  • Ecosystem development- Developing an ecosystem for chip manufacturing in a green-field location is a major challenge.
  • Art of chip-making– Above all is the art of chip­-making. Despite the best of equipment, poor quality and low yields can make fabs fail.
Lessons from China
  • Acquiring existing fabs-Acquiring existing fabs has many advantages. They will enable India to build the fab ecosystem and train human resources.
  • ATMP (Assembly, Testing, Marking and Packaging)-Another strategy could be setting up ATMPs.
  • R&D in fab technologies-Much lower subsidies would be required, and the funds saved could be used for advanced R&D in fab technologies.
Mains Question: Discuss India’s Semiconductor Mission and its significance in boosting the domestic semiconductor industry. Analyze the challenges and also suggest measures to overcome them. Syllabus Mapping
  • Subject: Polity & Governance (GS-II)
  • Sub-topic: Government Policies & Intervention
  • Introduction: Briefly explain the importance of semiconductors in various industries.
  • Overview of India’s Semiconductor Mission
  • Significance of India’s Semiconductor Mission
  • Challenges faced by India’s Semiconductor Mission
  • Suggest policy interventions to address challenge
  • Conclude accordingly

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