India Semiconductor Mission: Aims, Incentives, Challenges
Why in the news
With global demand for chips climbing, the India Semiconductor Mission (ISM) was highlighted as the country’s route to building its own chip and display manufacturing base.
Key facts
- Launched: December 2021, within the Make in India and Atmanirbhar Bharat push.
- Implementing ministry: MeitY, through the Semicon India Programme.
- Outlay: Rs 76,000 crore (about $10 billion).
- Vision: make India a global semiconductor manufacturing hub and strengthen its role in the electronics supply chain.
- India imports over 90% of its chip needs, mainly from China, Taiwan and South Korea.
Objectives
- Set up semiconductor fabrication units.
- Build a strong chip design ecosystem and boost R&D.
- Attract investment and tie-ups with global chip firms.
- Cut import dependence.
Why India needs it
- The global chip market is expected to touch $1 trillion by 2030.
- The COVID-19 chip shortage delayed automobile and electronics output.
- India is the world’s second-largest mobile phone maker, with growing 5G, AI and IoT demand.
- Self-sufficiency matters for defence, cybersecurity and critical infrastructure.
Incentive components
| Scheme | Support |
|---|---|
| Fab incentive | Up to 50% financial assistance for fabs in India |
| Design Linked Incentive (DLI) | Rs 1,500 crore for chip design startups and firms |
| Display manufacturing | OLED, AMOLED and MicroLED fabrication |
| Electronics Manufacturing Cluster | Semiconductor clusters, including in Tamil Nadu, Gujarat, Karnataka and Uttar Pradesh |
Projects mentioned
- Vedanta-Foxconn: $19.5 billion announced in 2022 for a fab in Gujarat (28nm and 65nm chips).
- ISMC: $3 billion in Karnataka for a 65nm foundry.
- Tata Electronics: plans a manufacturing unit; Tower Semiconductor (Israel) has shown interest.
Challenges
- No existing high-tech fab infrastructure.
- Shortage of skilled engineers and technicians.
- Competition from established players; raw materials such as silicon wafers and photolithography equipment are imported.
- Fabs need 5-7 years and billions of dollars.
Way forward
- Partnerships with Taiwan, Japan, the USA and Europe.
- University programmes and research and training centres.
- Focus on AI-driven chip design, 5G chipsets and quantum computing semiconductors.
Exam angle
- Nodal ministry: MeitY; programme name: Semicon India.
- Total outlay: Rs 76,000 crore; fab support up to 50%.
- Related terms: fab, DLI scheme, EMC scheme.