GS Paper 3:
Topics Covered: Science and technology.
Context:
The Economic Survey for 2021-22 has said that Shortage of semiconductors led to closure or lowering of production by several firms from diverse industries.
What has the government done to address the shortage?
- The government has earmarked Rs 76,000 crore for semiconductors and display manufacturing segment.
- The PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by Covid-19 but also assist them to become globally competitive, especially in chip making.
- The government recently released a vision document for the electronics sector which envisages that the domestic electronic production has potential to reach around Rs 22 lakh crore by 2026.
Semiconductor Chips:
Semiconductors are materials which have a conductivity between conductors and insulators. They can be pure elements, silicon or germanium or compounds; gallium, arsenide or cadmium selenide.
Significance of Semiconductor Chips:
They are the basic building blocks that serve as the heart and brain of all modern electronics and information and communications technology products.
- These chips are now an integral part of contemporary automobiles, household gadgets and essential medical devices such as ECG machines.
Recent Increase in Demand:
The Covid-19 pandemic-driven push to take sizable parts of daily economic and essential activity online, or at least digitally enable them, has highlighted the centrality of the chip-powered computers and smartphones in people’s lives.
- The pandemic and the subsequent lockdowns across the world also forced shut crucial chip-making facilities in countries including Japan, South Korea, China and the US.
- Its shortage causes cascading effects, given that the first one creates pent-up demand that becomes the cause for the follow-up famine.
India’s Semiconductor Demand and Related Initiatives:
India currently imports all chips and the market is estimated to touch $100 billion by 2025 from $24 billion now.
- The Union Cabinet has recently allocated an amount of ₹76,000 crore for supporting the development of a ‘semiconductors and display manufacturing ecosystem’.
- India has also launched the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) under which a budget outlay of Rs 3,285 crore is spread over a period of eight years for manufacturing of electronics components and semiconductors.
Challenges ahead:
- High Investments Required.
- Minimal Fiscal Support from Government.
- Lack of Fab Capacities.
- Insufficient Grants under PLI Scheme.
- Resource Inefficient Sector.
Insta Curious:
Did you know that electronics is recognised as a ‘meta-resource’ across the world? What is a ‘meta-resource’? Reference: read this.
InstaLinks:
Prelims Link:
- What is India Semiconductor Mission?
- India’s Status in Semiconductor Design and manufacturing?
- Key proposals under the National Policy on Electronics.
- Production linked incentive scheme- when was it announced?
- Who will implement it?
Mains Link:
Growing importance of Semiconductors or chips/integrated circuits (ICs) and China’s experience with the manufacturing and design of the same provides a strong case for focusing on chip designs in India. Comment.
Sources: the Hindu.
