{"id":248995,"date":"2023-06-21T20:25:04","date_gmt":"2023-06-21T14:55:04","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=248995"},"modified":"2023-06-21T20:25:04","modified_gmt":"2023-06-21T14:55:04","slug":"semiconductor-fab-the-unfinished-agenda","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/semiconductor-fab-the-unfinished-agenda\/","title":{"rendered":"Semiconductor fab: the unfinished agenda"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cSemiconductor fab: the unfinished agenda\u201d <\/strong>published in \u201cThe Hindu\u201d <\/strong>on 21st June 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS 3 \u2013 Indian Economy \u2013 Industrial Policies<\/p>\n

News – <\/strong>The article explains the issues related to the semiconductor industry in India.<\/p>\n

What were the earlier attempts by India for semiconductor manufacturing?<\/strong><\/h2>\n

The first serious attempt was made in 2007 in the form of a Special Incentive Package<\/strong>. But it yielded no response.<\/p>\n

The second attempt in the form of Modified SIP<\/strong> in 2012 fared better. India came close to having a fab. Two consortia <\/strong>were approved by the Cabinet.<\/p>\n

The government offered incentives <\/strong>amounting to nearly $5 billion in the form of cash and tax cuts. But finally, both failed to mobilise resources.<\/strong><\/p>\n

How has China established itself as a major player in semiconductor manufacturing?<\/strong><\/h2>\n

China started late in the semiconductor fab industry<\/strong>. But backed by massive government financial support over the last two decades, it acquired hundreds of loss-making fabs <\/strong>from around the world and built its fab industry.<\/p>\n

China\u2019s chip production has grown rapidly. China has become one of the major producers <\/strong>of chips. It has a strategic stranglehold<\/strong> on chip-making due to its market supremacy<\/strong> in rare earths.<\/p>\n

What is the response of western countries to China’s dominance in semiconductor manufacturing?<\/strong><\/h2>\n

Over the last year, the U.S. and its Western allies have blocked the transfer of the latest fab-related technology <\/strong>to China.<\/p>\n

The U.S. enacted the CHIPS and Science Act<\/strong> in 2022, with nearly $40 billion in subsidie<\/strong>s for semiconductor manufacturing to the country. The European Union sanctioned \u20ac7.4 billion for a new fab<\/strong> in France.<\/p>\n

What are issues involved in semiconductor manufacturing?<\/strong><\/h2>\n

Investment in a semiconductor fab is risky. Billions of dollars need to be recovered before the technology becomes obsolete.<\/p>\n

There is a need for substantial production<\/strong> volumes for economic viability<\/strong> that is adequate to meet global demand<\/strong>.<\/p>\n

Developing an ecosystem for chip manufacturing in a greenfield location<\/strong> is a major challenge. Hundreds of chemicals and gases are required for chip fabrication.<\/strong><\/p>\n

The advantage of semiconductors having a small freight-to-price ratio and a zero-custom duty regime<\/strong> under the Information Technology Agreement, 1996, facilitates production in a single location and global sales.<\/p>\n

People need to be trained. Abundant clean water<\/strong> should be available. The art of chip-making is important. Despite the best of equipment, poor quality and low yields can make fabs fail.<\/p>\n

There are other issues, such as whether to set up a logic\/processor, memory or analog fab.<\/strong> The most advanced set of technologies is needed to manufacture them.<\/p>\n

A relatively easier option is Assembly, Testing, Packaging and Marking (ATMP)<\/strong>. But ATMPs have little value<\/strong> in terms of actual chip-making.<\/strong><\/p>\n

Semiconductor fabrication<\/strong> represents the ultimate frontier of human tech advancement<\/strong>. As per Moore\u2019s law<\/strong>, the number of transistors in a unit area doubles every 18 months. But the miniaturisation involves higher complexity and costs.<\/p>\n

What is the way forward for the success of semiconductor manufacturing in India?<\/strong><\/h2>\n

China acquired loss-making fabs<\/strong> and then set up its own logic fab. It provides lessons. Acquiring existing fabs has many advantages. They are reasonably priced, have stabilised technology, and a supply chain ecosystem<\/strong>. They have an established product line, and market. <\/strong><\/p>\n

They will enable India to build the fab ecosystem<\/strong> and train human resources. Much lower subsidies<\/strong> would be required. Funds saved could be used for advanced R&D in fab technologies. <\/strong><\/p>\n

Another strategy could be setting up ATMPs.<\/strong> China has over 100 ATMPs.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cSemiconductor fab: the unfinished agenda\u201d published in \u201cThe Hindu\u201d on 21st June 2023. Syllabus: GS 3 \u2013 Indian Economy \u2013 Industrial Policies News – The article explains the issues related to the semiconductor industry in India. What were the earlier attempts by India for semiconductor manufacturing? The… Continue reading Semiconductor fab: the unfinished agenda<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10498],"class_list":["post-248995","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/248995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=248995"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/248995\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=248995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=248995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=248995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}