Daily Current Affairs : 24-June-2023
Semiconductors are specialized substances with unique electrical properties that serve as the foundation for computers and electronic devices. They control the flow of electrical current and are crucial components in various industries. The global semiconductor industry is valued at billions of dollars and plays a significant role in the electronics sector. In this essay, we will explore why India needs to invest in semiconductor manufacturing, highlighting its advantages and the challenges it faces.
Advantages of Semiconductor Manufacturing in India:
- Design and Intellectual Labour:
- India boasts a large pool of semiconductor design engineers, many of whom are of Indian origin.
- Chipmaking firms like Intel and NVIDIA have established facilities in India, employing local talent.
- China’s aging population and international sanctions put it at a disadvantage in this regard.
- Huge Consumer Base:
- India’s population makes it the largest populous economy globally.
- This vast domestic market presents significant opportunities for semiconductor manufacturers.
Challenges Faced by India:
- Costly and Capital Intensive:
- Setting up a semiconductor fab requires substantial investment, ranging from $3 to $7 billion.
- The resource-intensive nature of chip production makes it a challenging endeavor.
- Lack of Fiscal Support from the Government:
- The level of fiscal support currently provided by the government is insufficient compared to the investment required.
- To establish a robust semiconductor industry, greater financial incentives and support are necessary.
- Lack of Latest Technology:
- India initially focuses on “lagging-edge” technology nodes to supply the automotive and appliance sectors.
- Creating global demand may prove challenging, as countries like Taiwan already offer cutting-edge chip technology worldwide.
- Water Efficiency:
- Chip manufacturing requires substantial amounts of ultrapure water daily.
- The Indian government may face difficulties providing this resource, particularly in regions prone to drought conditions.
- Supply of Power:
- A consistent and uninterrupted power supply is vital to the chip manufacturing process.
- Even minor fluctuations or spikes can result in significant financial losses.
- Consumer Demand:
- The government needs to drive up consumer demand in the semiconductor industry to ensure the success of these ventures.
- Relying solely on taxpayer subsidies is not a sustainable long-term solution.
Important Points:
- Semiconductor manufacturing in India is crucial for developing a domestic electronics supply chain and reducing reliance on foreign imports, particularly from China.
- India has advantages in design and intellectual labor, with a large pool of semiconductor design engineers.
- The country’s huge domestic consumer base provides significant opportunities for semiconductor manufacturers.
- Setting up a semiconductor fab requires substantial investment, making it a capital-intensive process.
- The level of fiscal support from the government is currently insufficient compared to the scale of investments required in the semiconductor industry.
- India initially focuses on “lagging-edge” technology nodes, which may pose challenges in creating global demand compared to countries offering cutting-edge chip technology.
- Water scarcity and the need for an uninterrupted power supply are significant challenges in semiconductor manufacturing.
- The government must drive consumer demand in the semiconductor industry to ensure sustainable growth, rather than relying solely on taxpayer subsidies.
Why In News
Recently, Micron Technology, the renowned US chipmaker, made an exciting announcement about their foray into the Indian market. With an investment of up to $825 million, the company will establish its inaugural semiconductor assembly and test facility in Gujarat, India, as part of a lucrative incentive scheme initiated by the Union government. This strategic move showcases Micron’s commitment to expanding its global presence while capitalizing on the immense potential of India’s thriving semiconductor industry.
MCQs about The Path to Semiconductor Self-Reliance in India
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What is the primary reason for India’s focus on semiconductor manufacturing?
A. To reduce dependency on foreign imports
B. To increase consumer demand in the electronics industry
C. To drive technological advancements in the automotive sector
D. To establish dominance in the global semiconductor market
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Which advantage does India possess in semiconductor manufacturing?
A. Access to cutting-edge chip technology
B. Abundant natural resources for chip production
C. A large pool of semiconductor design engineers
D. Strong government subsidies for semiconductor fabs
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What is one challenge faced by semiconductor manufacturing in India?
A. Limited consumer demand in the domestic market
B. Excessive reliance on taxpayer subsidies
C. Easy access to the latest cutting-edge technology
D. Abundance of ultrapure water for chip-making
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Why is an uninterrupted power supply crucial in semiconductor manufacturing?
A. Fluctuations in power can lead to substantial financial losses
B. Power supply is necessary to access the latest chip technology
C. Power shortage can be compensated by abundant water supply
D. Power stability is vital for attracting foreign investment
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