India plans $15 billion second push for chipmaking.

India plans $15 billion second push for chipmaking.

Subject: Eco

Sec: National Income

Context:

The government plans to increase the funding outlay for the second phase of its chip manufacturing incentive policy to $15 billion from the $10 billion it had committed for the first phase.

More on News:

• Tata is building India’s first commercial fabrication plant along with its Taiwanese partner Powerchip Semiconductor Manufacturing Corporation (PSMC) for a cost of more than Rs 91,000 crore.
• The government has also approved three assembly and testing plants, which are called ATMP and OSAT in chip parlance.
• The assembly and testing plants are less complex than the semiconductor fabrication plant.
• The first of these three plants was approved in June 2023, and is being built by US-based Micron Technology.

Why chipmaking prowess matters

• India currently has virtually no footprint in manufacturing semiconductor chips.
• The bulk of the global chip production happens in countries like Taiwan and the United States. Domestic fabrication plants will boost India’s economic and strategic imperatives.
• India hopes to seek out opportunities to boost the local industry with help from government-funded schemes.
• Tata-PSMC fab will not produce cutting-edge nodes, which requires a level of technology that is not available with either of these companies.
• The entry barriers to chip manufacturing are quite high, as China, which has poured a lot of money into its Semiconductor Manufacturing International Corporation (SMIC), has discovered.
• An enormous amount of technological innovation is needed to manufacture chips of smaller node sizes, which is an area in which companies such as the Taiwan Semiconductor Manufacturing Company Ltd (TSMC) have a massive advantage.

Semiconductor Chip:          

• A semiconductor has properties between a conductor (which conducts electricity) and an insulator (which does not).
• Purest form a semiconductor is a very weak conductor of electricity.
• However, its electrical properties can be changed by adding small amounts of certain substances called ‘dopants’.
• Complex circuits are “printed” on the semiconductor by strategically placing dopants.

Transistor:

• A transistor is a versatile electronic component built using a semiconductor.
• It can function as an electronic switch, amplifier, or part of high-frequency signal circuits.

Need for Semiconductor Manufacturing in India:

• Reducing imports: Taiwan, Singapore, Hong Kong, Thailand, and Vietnam are the only countries from which India imports all of its chips.
• Atmanirbharta: India’s semiconductor industry would benefit domestic businesses by reducing their reliance on imports and by generating income from exports to other nations.
• Drivers of ICT Development: India has to grow its ICT (Information and Communications Technology) industry to take advantage of the fourth industrial revolution. Semiconductors are crucial to this process.
• National Security: They are employed in vital infrastructures that affect national security, including the transmission of power and communications.
• Strategic Autonomy: By reducing India’s reliance on other nations for essential technology, domestic semiconductor manufacturers can increase the country’s strategic