Why in News?
Government Transition and Policy Continuity:
- The recently re-elected coalition government has returned to power with a reduced majority, prompting interest in the future direction of semiconductor manufacturing policies.
Evolution of Semiconductor Policies: The focus is on how policies and incentives, particularly in the semiconductor sector, will develop over the next five years.
More Details About the News:
- Incentive Package for Semiconductors: India unveiled a Rs 76,000 crore incentive package in December 2021 to boost semiconductor manufacturing.
- By April, four projects were sanctioned:
- Assembly, Testing, Marking and Packaging (ATMP) unit by Micron.
- Outsourced Semiconductor Assembly and Test (OSAT) units by CG Power.
- A Silicon fab by Tata Electronics Private Limited (TEPL).
- These projects, totaling over Rs 1.48 lakh crore in investments, aim to bolster domestic semiconductor capabilities.
Fund Utilization:
- As of May, approximately Rs 5,000 crore remains from the semiconductor package, suggesting substantial initial fund allocation.
- This includes incentives for 11 approved Design Linked Incentive (DLI) schemes.
Key Developments and Criticisms:
- Micron’s ATMP unit approval initially faced scrutiny but is pivotal in the India-US iCET initiative, fostering bilateral cooperation.
- Subsequent projects, led by Indian investors like Tata Semiconductor Assembly and Test (TSAT) Pvt Ltd, mark a significant milestone post the Micron agreement.
Goals and Challenges
- Market Share Ambition: India targets achieving a 10% global market share in ATMP/OSAT within five years, despite stiff competition from leading countries like China, Taiwan, South Korea, Japan, Malaysia, and Vietnam.
- TEPL Silicon Fab Timeline and Impact: TEPL’s approved silicon fab plans to start with a capacity of 50,000 wafer starts per month (wspm). Construction and equipment installation will span 2-3 years, with an additional 3-5 years to reach full operational capacity. By 2030-2032, it aims to contribute approximately 0.2% to the global semiconductor capacity.
Challenges and Future Considerations
- Government Priorities and Incentives: Future government allocations towards silicon-based chip fab incentives are critical. Clarity on these priorities will bolster confidence among private sector investors.
- Technology and Node Approvals: Approval of Tower Semiconductors’ 65nm-40nm fab could enhance India’s market share, diversifying into analog chips. Clear guidelines on approving 28nm or smaller nodes are essential to manage industry expectations.
- Powerchip’s ongoing development of 28nm logic, expected to enter production in a few years, underscores the evolving landscape.
Conclusion
The India Semiconductor Mission lacks key leadership positions such as CEO, CTO, and staff with commercial semiconductor industry expertise. This highlights the urgency of appointing experienced leaders to drive India’s semiconductor ambitions effectively.
Practice Question Q. Examine the role of international collaborations, particularly with the US under the iCET initiative, in India’s semiconductor manufacturing strategy. How does such cooperation impact bilateral relations and technological advancements in the sector? |
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