Semiconductors: Heroes Of The New Digital World

News: The government has launched the Semicon India program to secure a semiconductor manufacturing ecosystem in India. It will make India self-reliant on key items such as semiconductors.

About the government initiative

It provides attractive fiscal and non-fiscal incentives for companies to set up production across the value chain.

Decoding chips:

A chip essentially comprises electronic circuits which are layered over a substrate made up of silicon.

All chips have a basic mandate, either to store, transmit or process data at optimal speeds. In addition, they can also be used to accommodate the requirements of the devices they fit into.

What are the processes in the making of Semiconductors Device?

The making involves a series of intense and complex processes. The making demands extreme precision and large capital investments.

Fabless Phases (only design)

Semiconductor chips are first designed in R&D centres using specialized software-based Electronic Design and Automation tools.

Foundry Phase (only fabrication)

The Graphic Design System files containing the design are then transferred to a fab/foundry to initiate the manufacturing process.

It involves the manufacturing of electronic circuits in a very specialized and highly controlled environment, possibly the cleanest places on earth.

Specific operations are performed on the silicon wafer over the course of 2-3 months.

Outsourced Semiconductor Assembly and Test (OSAT) Phase

At a later stage, the products are subjected to testing, packaging, and assembly through Outsourced Semiconductor Assembly and Test (OSAT) companies. It is labor-intensive and a less capital-intensive process in manufacturing.

Why is it important for India to become self-reliant in semiconductors?

These are used in memory chips, communication chips, logic chips, and sensor chips in the today’s digitally interconnected world,

It enabled schools, offices, and businesses to operate and remain functional, during the Covid pandemic when the whole world came to a standstill and the only way forward was digital.

It also powered the supercomputers which enabled the rapid development of the Covid vaccine. Therefore, it has played an important role in the resumption of economic and social activities globally.

It is the core of future technologies like AI, blockchain, 5G technologies, Yuval Noah Harari’s Homo Deus– a mix of flesh and silicon – in the near future.

India imported $54 billion of electronic goods in 2020. Most of the import was from China. The large-scale import dependence has a negative impact on India’s balance of payments, forex, and strategic interests.

It forms the bedrock of all ICT equipment. The indigenisation of the supply chain has positive implications across sectors like telecom, defense, space, internet surveillance, power, automobile, etc.

In addition, there is a large indigenous market for semiconductors. For example, India’s semiconductor consumption was $20 billion in 2020, and it is growing at a CAGR of 15%.

The Way Forward

The success of Semicon India is fundamental to Make in India and Digital India. It is key for India’s integration into the global value chain.

Source: The post is based on an article “Semiconductors; Heroes of the New Digital World” published in The Times of India on 30^th June 2022.