Hindu Editorial Analysis : 9-August-2023

In the rapidly evolving landscape of technology, semiconductors stand as the unsung heroes, powering everything from our smartphones to the vast Internet of Things. The United States’ Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022, commonly referred to as the CHIPS Act, has completed its first year as a law. This legislation aims to propel the semiconductor industry in the United States to new heights, ensuring national competitiveness, innovation, and security.

Understanding Semiconductors: Tiny Blocks of Power

Semiconductors, despite their small size, hold immense importance in our modern world. These thumbnail-sized wonders are the fundamental building blocks of electronic devices that have become integral to our lives. From smartphones that keep us connected to the intricate network of IoT devices, semiconductors power it all. At the heart of a semiconductor chip lies a sliver of silicon that is meticulously etched with billions of microscopic transistors. These transistors, with their complex patterns and arrangements, control the flow of current and execute various computational instructions, enabling the functionalities we often take for granted.

The Global Landscape of the Semiconductor Industry

The semiconductor industry is not just a niche sector; it’s a powerhouse driving the global electronics industry valued at around $3 trillion. This vital industry itself is estimated to be worth $500-$600 billion. It’s a tightly knit domain, dominated by key players like Taiwan, South Korea, and the United States. For instance, a staggering 90% of 5nm chips, the cutting-edge technology of today, are produced by the Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan. However, geopolitical tensions, such as those between the U.S. and China concerning Taiwan, and disruptions caused by conflicts like the Russia-Ukraine crisis, have pushed major economies to reevaluate their positions in the semiconductor landscape.

The Rising Star: India’s Semiconductor Sector

India, too, is stepping up its game in the semiconductor realm. Over the past decade, the country’s electronics and semiconductor manufacturing sector has witnessed remarkable growth. A telling example of this transformation is the shift from 92% of mobile devices being imported in 2014 to an impressive 97% of devices being manufactured domestically in 2022.

Unveiling the CHIPS Act: A Pathway to American Competitiveness

The CHIPS Act, signed into law in 2022, emerges as a beacon of hope for bolstering the United States’ semiconductor prowess. With a committed investment of $52.7 billion over five years, the Act aims to rejuvenate American innovation, competitiveness, and national security within the semiconductor domain. In a world where industrial policies have become the norm for nation-states aiming to secure technological prominence, the CHIPS Act provides valuable insights into the mechanisms required for effective policy execution.

Why In News

The CHIPS Act, enacted in 2022, has celebrated its first anniversary, marking a year of impactful initiatives aimed at fostering domestic semiconductor production. As its inaugural year concludes, the act continues to drive innovation, stimulate economic growth, and strengthen the United States’ position in the global semiconductor industry.

MCQs about The CHIPS Act and the Resurgence of American Semiconductors

  1. What are semiconductors primarily composed of?
    A. Silver and gold
    B. Silicon and transistors
    C. Copper and aluminum
    D. Iron and steel
    Correct Answer: B. Silicon and transistors
    Explanation: Semiconductors are primarily composed of silicon, which is etched with billions of microscopic transistors. These transistors control the flow of current and execute various computational instructions.
  2. Which country dominates the production of 5nm semiconductor chips?
    A. United States
    B. China
    C. South Korea
    D. Taiwan
    Correct Answer: D. Taiwan
    Explanation: Taiwan, particularly through the Taiwan Semiconductor Manufacturing Company (TSMC), is a major producer of 5nm semiconductor chips, demonstrating its industry dominance.
  3. How has India’s semiconductor sector transformed over the past decade?
    A. It has focused solely on importing chips
    B. It has faced a decline in manufacturing capabilities
    C. It has witnessed significant growth in electronics import
    D. It has experienced a quantum growth in manufacturing semiconductor products
    Correct Answer: D. It has experienced a quantum growth in manufacturing semiconductor products
    Explanation: India’s semiconductor sector has undergone remarkable growth over the past decade, transitioning from importing a high percentage of mobile devices to significantly increasing domestic manufacturing.

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