What Are 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.
Its shortage causes cascading effects, given that the first one creates pent-up demand that becomes the cause for the follow-up famine.
What Is The Significance of Semiconductors
Semiconductors are essential to almost all sectors of the economy including aerospace, automobiles, communications, clean energy, information technology and medical devices etc.
Demand for these critical components has outstripped supply, creating a global chip shortage and resulting in lost growth and jobs in the economy.
India Stand In The Semiconductor Market
India currently imports all chips and the market is estimated to touch USD 100 billion by 2025 from USD 24 billion now. However, for the domestic manufacturing of semiconductor chips, India has recently launched several initiatives:
The Union Cabinet has allocated an amount of Rs 76,000 crore in 2021 for supporting the development of a ‘semiconductors and display manufacturing ecosystem’.
Consequently, a significant number of incentives would be provided to design companies to design chips.
India has also launched the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) for manufacturing of electronics components and semiconductors.
In 2021, India announced its roughly USD 10 billion-dollar Production-Linked Incentive (PLI) scheme to encourage semiconductor and display manufacturing in the country.
In 2021, the MeitY also launched the Design Linked Incentive (DLI) Scheme to nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve a turnover of more than Rs.1500 Crore in the next 5 years.
India’s own consumption of semiconductors is expected to cross USD 80 billion by 2026 and to USD 110 billion by 2030.
Top 5 Countries Producing Semiconductors
Top 5 Countries that produce the most semiconductors are:-
- Taiwan,
- South Korea,
- Japan,
- United States,
- China.
Taiwan and South Korea make up about 80% of the global foundry base for chips. TSMC, the world’s most advanced chipmaker, is headquartered in Taiwan.
Currently, foundries in Taiwan account for over 70% of the chips that mobile devices made in India utilise, according to industry estimates by the Indian Cellular and Electronics Association
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