Our chip-making game shows welcome realism

Source– The post is based on the article “Our chip-making game shows welcome realism” published in the “mint” on 26th September 2023.

Syllabus: GS3- Economy

Relevance- Semiconductor manufacturing

News– Recently, India’s electronics and infotech minister Ashwini Vaishnaw talked about  focus on the emerging segment that remains largely unexploited in semiconductor manufacturing

What are some facts about ‘compound semiconductors’?

It is the next major innovation. These chips are claimed to be more energy-efficient and offer superior thermal conductivity. It enables faster processing speeds.

However, their high production cost has limited their usage to specialized applications in fields such as telecommunications, power equipment, and automotive technology.

This segment holds significant sales potential, but its growth trajectory will depend on factors such as the availability of raw materials and the enhancement of chip performance.

Why does a strategic approach, focusing on a specific niche rather than competing with major chip manufacturers appear more realistic?

In emerging fields where all participants are still developing their capabilities, local chip producers in India have a better chance of attaining global competitiveness.

In contrast, the silicon industry is already highly competitive. Substantial investments are being made in fabrication facilities in the EU, US, and China, primarily aimed at reducing reliance on imports from Taiwan.

What are the challenges in achieving global leadership in a specific niche?

The semiconductor industry is influenced by geopolitics. China has restricted the exports of gallium in response to tech restrictions imposed by the US.

Gallium is a key component used in chip production and is found in bauxite and zinc ores. Other players like the Vedanta Group could potentially secure a supply source for gallium compound chips.  However, the actual progress of locally produced niche chips in the chip-making process remains uncertain.