Print Friendly, PDF & Email

Semiconductor chip shortage:

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:

  1. High Investments Required.
  2. Minimal Fiscal Support from Government.
  3. Lack of Fab Capacities.
  4. Insufficient Grants under PLI Scheme.
  5. 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:

  1. What is India Semiconductor Mission?
  2. India’s Status in Semiconductor Design and manufacturing?
  3. Key proposals under the National Policy on Electronics.
  4. Production linked incentive scheme- when was it announced?
  5. 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.

Calendar

February 2022
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
28  

Search by Category