Background: Rising Imports of Semiconductor Chips
- Sharp Increase in Imports:
- Monolithic Integrated Circuits (ICs) imports reached ₹1.05 lakh crore in FY24.
- 2,000% rise in Monolithic IC imports compared to FY16.
- 4,500% increase in memory chip imports since FY16.
- 4,800% rise in amplifier imports since FY16.
Relevance : GS 3(Economy ,Import ,Export)
- Import Dependence on China:
- China has been the largest supplier of semiconductor chips to India for the past decade (except FY19).
- Other key suppliers: Hong Kong, Japan, South Korea, Singapore, and Taiwan.
- Increasing Share in Total Imports:
- Monolithic ICs now constitute 2.09% of total imports (FY25, April-November), up from 0.19% in FY16.
Government’s Push for Domestic Production
- First India-Made Semiconductor in 2024:
- Announced by Minister Ashwini Vaishnaw at WEF, January 2024.
- Aims to reduce import dependency and boost self-sufficiency.
- Key Semiconductor Manufacturing Facilities:
- Tata Semiconductor Assembly & Test Facility (Morigaon, Assam).
- Dholera Semiconductor Fabrication Facility (Tata Electronics + Taiwan’s Powerchip Semiconductor).
- Total of 5 manufacturing plants under construction.
The Semicon India Programme
- Launched in 2021 to develop semiconductor and display manufacturing ecosystems.
- Budget Allocation vs. Actual Spending:
- FY23: ₹13 crore spent vs. ₹200 crore (RE).
- FY24: ₹681.11 crore spent vs. ₹1,503.36 crore (RE) vs. ₹3,000 crore (BE).
- FY25: ₹3,816 crore (RE) vs. ₹6,903 crore (BE).
- Budget cuts indicate implementation challenges, but RE for FY25 has doubled compared to FY24.
Challenges in India’s Semiconductor Ecosystem
- Limited Value Addition:
- India’s current focus is on assembly, testing, packaging, and fab segments.
- Missing Capabilities:
- EDA (Electronic Design Automation): Software used for chip design.
- Core IP: Semiconductor patents.
- Wafers & Fab Tools: Raw semiconductor materials and fabrication machinery.
- Advanced Packaging Tools (ATP).
- Chip Design Expertise.
Strategic Importance & Future Outlook
- Reducing Dependence on China: Critical for supply chain resilience.
- Strengthening Domestic Industry: Need for incentives, R&D investment, and infrastructure development.
- Global Positioning: India aims to integrate into the global semiconductor value chain by expanding fabrication, design, and research capabilities.
