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Semiconductor Industry in India


Semiconductor, a class of crystalline solids whose electrical conductivity is midway between that of a conductor and an insulator. Semiconductors are widely used in the production of numerous electronic devices, such as diodes, transistors, and integrated circuits. Due to their portability, dependability, power efficiency, and low price, these devices have found widespread use.

It is difficult to envision living without electronic devices in the twenty-first century, and the usage of semiconductors has revolutionised the electronic industry by making devices more reliable, efficient, and compact.

Significance For Global Economy

Semiconductors and displays are at the heart of modern electronics, driving the next stage of digital revolution under Industry 4.0.

Semiconductor devices can exhibit a variety of useful characteristics, including adjustable resistance, preferential current flow in one direction, and sensitivity to light and heat. Their conductivity and other properties can be modified by introducing impurities, a process known as doping, to fit the precise requirements of the electronic component in which they operate.

Their true function comprises signal amplification, switching, and the conversion of energy. As a result, they are utilised in nearly all industries, and the companies that make and test them are regarded as great indicators of the health of the economy as a whole.

The semiconductor business is a vital sector of global economy, with semiconductor components present in a vast array of consumer and commercial items, including automobiles, computers, mobile devices, and consumer electronics. And our greatest potential remains untapped. Semiconductors, as the building blocks of technology, will continue to push the world's greatest innovations. Major industries, ranging from aerospace and consumer electronics to energy and medical, will be transformed.

The Industry Know-How

Raw Material

Semiconductors, also known as integrated circuits (ICs) or microchips, are normally fabricated from pure elements, such as silicon or germanium, or compounds such as gallium arsenide.


The chip-making process is sophisticated and precise, with numerous other processes in the supply chain such as chip-designs done by corporations to build new circuits for use in appliances, designing software for chips, and patenting them via core Intellectual Property (IP) rights. It also entails creating semiconductor fabrication machinery, establishing fabs or factories, and developing ATMPs (assembly, testing, marking and packaging).

Opportunity for India

The chip-making sector is highly concentrated, with Taiwan, South Korea, and the United States among the major players. According to a New York Times estimate, Taiwan Semiconductor Manufacturing Company mass-produces 90% of 5nm (nanometer) chips (TSMC). As a result, the global chip scarcity, US-China tensions over Taiwan, and supply chain disruptions caused by the Russia-Ukraine conflict have prompted major economies to enter the chip-making business.

India unveiled its about $10 billion production-linked incentive (PLI) scheme in December 2021 to promote semiconductor and display manufacture in the country. It also offered financial support for a design-linked initiative (DLI) scheme to encourage global and domestic investment in design software, intellectual property rights, etc. According to the Ministry of Electronics and Information Technology, the demand for semiconductors in India would climb to between $70-$80 billion by 2026 due to the rising demand for digital devices and electronic goods.


India has good chip design talent, but it has never developed chip fab capacity. The ISRO and DRDO both have their own fab factory, however they are primarily for their own needs and are not as sophisticated as the most recent in the globe.

Semiconductor and display production is a highly complex and technology-intensive industry with large capital requirements, high risk, long gestation and payback periods, and rapid technological advances that necessitate significant and ongoing investment. It is too dynamic and fast evolving.

Chip production also necessitates gallons of ultrapure water every day, which, according to experts, could be a challenge for the government to provide to firms, given the drought conditions that frequently affect huge portions of the country. Moreover, an uninterrupted power supply is essential to the operation, as even seconds of variations or spikes can cause grave losses.


India has been given a tremendous opportunity, which it must seize before it is too late. The semiconductor industry is at the heart of the ongoing digital revolution, and it has the potential to make India a critical link in the global value chain. Governments must collaborate with the private sector; the government has already launched the PLI and DLI schemes. There is a need for Semiconductors which India can meet, but it would require expanding on existing capabilities and establishing solid policy structures and ecosystems. Collaboration between industry and government is also essential.


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