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10th November 2023 (9 Topics)

Semiconductor Fabrication in India

Context:

As incentives for semiconductors sputter, course corrections are due

Current State of Semiconductor Production in India

  • Investing in Semiconductor Fabrication: India has strategically invested substantial funds in semiconductor fabrication, recognizing its pivotal role across industries through the Production-Linked Incentive (PLI) schemes.
  • Underutilized Funds and Strategic Concerns: Despite the financial backing, concerns arise due to the underutilization of these funds, prompting a critical evaluation of the strategy's effectiveness.
  • Strength in Design, Gaps in Manufacturing: India boasts excellence in semiconductor design however, attention is warranted to bridge the gaps in the manufacturing ecosystem. Strengthening this aspect is crucial for a comprehensive and successful semiconductor strategy in the country.

India Semiconductor Mission and PLI Schemes

  • Strategic Mission for Semiconductor Ecosystem: The India Semiconductor Mission (ISM) stands as a pivotal initiative. Despite its significant allocation of funds, the mission faces challenges that need careful consideration.
  • PLI Schemes' Limited Impact: Existing Production-Linked Incentive (PLI) schemes, despite their substantial funding, demonstrate limited promise concerning employment generation and value addition. The need for a more comprehensive approach becomes evident as the impact falls short of expectations.
  • Challenges with Large Manufacturing Emphasis:The emphasis on incentivizing large manufacturing plants raises concerns about the limited scope of these incentives. Multinational chipmakers exhibit hesitancy in making substantial commitments, highlighting the need for a nuanced and adaptable strategy.

Clarity and Tangible Outcomes for Effective Spending

  • Strengthening Semiconductor Design and Overcoming Challenges: To fortify India's position in the semiconductor domain, there is a pressing need to bolster efforts in semiconductor design. Additionally, addressing challenges in establishing semiconductor wafer fabrication units is crucial for a resilient and competitive semiconductor ecosystem.
  • Tangible Outcomes: India's semiconductor strategy should be aligned with tangible outcomes. Whether the goal is safeguarding cyber sovereignty, making electronics more affordable for Indian consumers, or positioning India as a global manufacturing center, clarity on objectives is crucial.
  • Focused semiconductor strategy: This clarity can help in course correction before massive spending occurs with minimal results, ensuring a more effective and focused semiconductor strategy for India's technological future.
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