Indian Semiconductor Mission

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Apurva Dhamankar

11/21/20222 min read

A semiconductor lies between the conductor and the insulator. It controls and manages the flow of the electronic current in devices. As a result, it has created a popular demand for computing components because, without these electronic chips, there would be no smartphones, radios, TVs, Laptops, Computers, or even advanced medical systems.

Covid-19 has gained the emerging need for electronic devices also increased due to e-vehicles setting up in India. The demand for semiconductors is expected to see a big boom.

This has initiated the government to look over the demand. The Government of India, Narendra Modi launched the Indian Semiconductor Mission (ISM) in December 2021, under the PLI scheme with a total financial outlay of ₹ 76000 Crores under the Ministry of Electronic and IT (MEITY). The purpose is to have a smooth functioning of the implementation of semiconductor manufacturing hubs in India. This is a huge step up for India in creating a whole new industry of semiconductors.

The ISM’s mission aims to attract investment in the semiconductor sectors, provide financial support to companies investing in semiconductors, and facilitate the building of digital infrastructure. The Centre has sanctioned financial support for up to 50% of the project cost for the formulation of silicon-based semiconductors fabrication establishment in the country. The mission also focuses on developing a comprehensive plan for a sustainable semiconductor manufacturing hub, Designing, Technological development, and display ecosystem in the country. This plan is been carried out for 6 years so, by the time in 2026, The semiconductor industry in India is expected to grow by $400 Million.

World’s Top Semiconductor Producers:

Taiwan is globally known for having the world’s largest semiconductor manufacturing company. Apart from Taiwan other countries, such as the US, China, South Korea, and Japan, are the biggest semiconductor producers in the world. Taiwan, China, and South Korea foundry companies account for 87% of the global market. Taiwan is the max Manufacturer, however, still there was a shortage of chips due to Russian Ukraine war leading to fears of supply disruption and gas issues.

Now India’s Vedanta Ltd. along with Taiwan’s Foxconn signed a pact with the Gujarat government for investing ₹1.54 trillion to set up a semiconductor and display FAB manufacturing unit in the state. Many countries are discussing collaborating with India in making the chips that are needed for electronic devices.

India is adopting the alternative 'China Plus One' diversification strategies to reduce its dependence on China and to emerge as a major player in electronics and semiconductor product manufacturing. So, therefore, India’s Ultimate goal is to become a major player in the global semiconductor supply chain. The Initiation taken by ISM would help the economy to uplift by enhancing semiconductor production, which will attract enormous investment and create highly skilled employment opportunities, in addition to lowering countries’ dependency on imports. It Would not only lessen domestic companies’ reliance on semiconductor imports but would also generate revenue through exports.

With ISM taking India’s leadership in the technology space to the next level, we are surely moving towards economic independence and giving India a new face on the global manufacturing map.

Thank you.

Regards,

Apurva Dhamankar,

Kautilya, IBS Mumbai.

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