Information and Technology: Semiconductor

Definition: It is a material product composed of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or aluminum.
Importance: Semiconductors are critical technological components for emerging technologies viz. artificial intelligence (AI) and Internet of things applications, 5G communications, cloud computing, automation, and electric vehicles, with a wide coverage of applications from basic consumable electronic gadgets and automobiles to areas of strategic operations.

India’s semiconductor demand is expected to reach $80 billion by 2026 and $110 billion by 2030.
India has a strong talent base, with 20% of the world’s semiconductor design engineers.
With companies looking to shift away from China, India has a great opportunity to become a key player.
Building a local semiconductor industry can greatly boost the entire economy.
India’s Act East policy can help strengthen ties with major semiconductor-producing countries in East Asia.

Reduce Imports: Currently, 80% of India’s semiconductor needs are met through imports.
Boost Economy: Local production can create jobs and grow the economy.
National Security: Dependence on foreign supply chains can be risky.
Support Innovation: Domestic manufacturing encourages new technology development.
Attract Investment: Indian companies can become more competitive and attract global investors.
Handle Supply Chain Issues: COVID-19 showed the risks of relying on international supply chains.
Lower Costs: Local manufacturing can save on import taxes, shipping, and currency exchange.
Support Digital India: Helps in creating technologies for a digital future.
Increase Exports: India can export semiconductors to global markets.
Create Partnerships: Promotes collaboration between Indian and global companies.

High Costs: Setting up semiconductor factories needs huge investment.
Skilled Workforce: There’s a shortage of skilled workers, especially in manufacturing.
Technology Complexity: Making semiconductors requires advanced tools and knowledge.
IP Protection: Strong laws are needed to protect ideas and attract global companies.
Limited R&D: More investment is needed in research and development.
Regulations: India’s rules for this industry are still developing and can create uncertainty.
Environmental Concerns: Manufacturing uses harmful chemicals that must be handled safely.

Semicon India Program: Offers $10 billion in financial help and other benefits for companies involved in chip making, design, packaging, and more.
India Semiconductor Mission: A dedicated team under Digital India to guide and support long-term growth in the semiconductor sector.
PLI and DLI Schemes: Production-linked incentive and design-linked incentive schemes aim to build a strong semiconductor ecosystem in India.