SCRAMBLE FOR SEMICONDUCTOR VENTURES

 Semiconductor industry refers to the aggregate of manufacturing units engaged in the design and fabrication of Semiconductors and semiconductor devices such as transistors and integrated circuits. Technically semiconductors are materials that have electrical conductivity between that of the conductor (such as copper wire)and  an  insulator (like a rubber glove).This unique property enables them ideal to use in electronics devices.. Semiconductors are essential to almost all sectors of the economy comprising of aerospace, automobiles, communications,clean energy, information technology and medical devices etc. Though industry was started around 1960 in due course fabrication of devices became vulnerable especially due to situations like Covid19 pandemic and also increased demand conditions for semiconductors but constrained by supply chain disruptions due to factors including work from home conditions. However sales from semiconductors  reached a peak level of $555.9 billion in 2021 up 26.2% where Chinese sales alone accounted for $192.5 billion. At the global level semiconductor industry has been dominated by USA, Taiwan, South Korea, Japan and Netherlands in descending order. The small island pacific state of Taiwan dominated world chip industry with Semi conductors-electricity- conducting chips found in thousands of products ranging from computers, smartphones medical equipment and military hardware which were in effect almost equivalent to the status of a major oil producer country of OPEC. Taiwan Semiconductor Manufacturing Company (TSMC) alone produced around half of global semiconductor chip production and it has been prompting countries  like USA and others  to invest heavily in their own production of chips. Indian electronics industry witnessed growth in the early years of 21st century supported by both government policies, incentives and by international investment. It may be noted here that semiconductors were utilized in a large number of industries ranging from Telecommunications, Information technology, industrial machinery and automation, medical electronics, automobiles,  engineering,power solar photovoltaic, Defence, aerospace, consumer electronics and appliances in India. 

As observed by experts our great task is how to nurture the heavily capital intensive semiconductor industry and mapp India's 'chip design eco system'. In recent years India has been pursuing a two pronged strategy of import substitution and export promotion  through the 'make in India ' program to increase manufacturing sector growth rate to 12-14 % per annum ,create 100 million additions to manufacturing jobs in the economy by 2022and also to ensure that manufacturing sector's contribution to GDP increased to 25% by 2022 later revised to 2025 .Similarly Digital India Programme emphasised development of secure and stable digital infrastructure capable of delivering Government services digitally with universal digital literacy. India's share in global electronics hardware production was only1.6%,communication and broadcasting equipment 31% and consumer electronics at 23%.Infact India is net importer of electronics goods heavily from countries like China.Schemes like Digital India, start ups and skill India along with liberal investment flows are undertaken in order to reduce our dependence on imports of semiconductors and electronic products.Under Atmanirbhar program the second phase of the Design- linked incentive (DLI)scheme for chip designing was introduced in December 2021 for indigenise innovations. About 2000 integrated circuits and chips are designed in India every year. More over Semicon India future DESIGN initiative covered over 30 semiconductor design start ups that have been established in India. There is also proposal to pick up equity stake in domestic chip design making companies.The proposed scheme is intended to ensure a stable ecosystem alongside building fables companies,  which are entities that design chips but outsource the manufacturing. Policy focusing on semiconductor industry whether manufacturing or design requires a long-term strategy as the sector is more capital intensive and involves sizeable costs in building fabrication units, upscalling,manufacturing capabilities and equipment such as thermal stimulations and pushing research.It is to be noted here that Indian design engineers constitute 20% of the world's workforce in companies like Intel,Micron and Quad countries-(India, USA, Japan and Australia)

As already indicated setting up of a semiconductor manufacturing facility require huge investment. Absence of suitable infrastructure like fabrication test ,assembly facility, research and development centers pose problems to the semiconductor industry in India. More over the semiconductor business needs very competent personnel to perform the highly technical and specialized tasks. Hence great investment in developing talents in the field chip design and testing etc are required. No country can be self sufficient. But we can be part of global supply chain of semiconductor industry provided through various incentives we are able to manufacture chips and other products. In December 2021 Union Government sanctioned rupees 76000 crores under PLI scheme to promote semiconductor industry. Semicon India conference 2023 saw some what better coordination between policy mechanism, private sector and leading global semiconductor firms. Consequentlly Foxconn has decided to setup rupees 3lakh crore i phone project and rupees 2 lakh chip equipment project in Karnataka.Other states like UP,Gujarat and Telengana are wooing the potential semiconductor global firms into their respective states.US based chipmaker.Micron planned to invest US$ 2.7 billion in Gujarat.  India is currently the second largest mobile phone manufacturer in the world. It may be observed that new semiconductor technologies are rolled out every two years by established firms like TSMC.Other leading players in foundry business like Samsung, Global Foundries and UMC periodically upgrade their technologies and products. 

 According to the policy makers India's Semiconductor mission is not restricted to domestic demand alone but strategic assertion of economic strength, Trade in technology will have to be conducted by keeping in mind what,where and with whom trade should be conducted. In Semiconductor Conference 2023 External affairs minister highlighted the variety of engagement between India and Quad partners like USA,Japan and Australia,and observed that our Semiconductor mission was aimed to meet both domestic and global requirements.India wants to safeguard its vital economic and strategic interests,free from potential disruption of supply chain despite reservations raised by few observers about there is a remote possibility of  a 'chip war'.As a part of semiconductor mission Union Government rolls out rolls out the red ccarpet.Recent shortage of semiconductors impacted several sectors in India including automotives, consumer electronics and Telecommunications because the country currently depends on imports for 80% of it's semiconductors required. India's Semiconductor market is projected to grow $110 billion by 2030.Firms like Samsung ,Global Foundries and UMC are looking for local partners to set up chip fabrication units. All the firms are given incentives under the Government's  Semiconductor mission in India which gives incentives worth $ 10 billion and it seeks to provide flat 50% incentives to successful companies to setup chip fabrication units. In short along with fiscal incentives India must be successful to attract major global  semiconductor firms of repute with accredited Indian collaborators meeting the requirements of adequate investment,appropriate skilling and training  tot cater the needs of various institutions and departments largely depending on semiconductors and its supply chain sustainability. Appropriate mix of competitive semiconductor ventures backed by skilled technical manpower, adequate investment and policy support can go a long way in the transformation of India into a hub of semiconductor industry.