Semiconductor is a material that has an electrical conductivity value falling between that of conductor (such as copper) and insulator (such as glass). Some popular semiconductors are silicon (Si), gallium (Ga), arsenic (As), and germanium (Ge). In their natural state, semiconductors are poor conductors. However, their conductivity improves with rising temperature and their conducting properties may be altered in useful ways by introducing impurities (doping) into a crystal structure. In 1956, the Nobel Prize in Physics was jointly awarded to Shockley, Bardeen, and Brattain for their contribution to semiconductor research and the development of transistor. There are two types of semiconductors: intrinsic (without any impurity) and extrinsic (added with impurity). The companies generally organize their activities around two main stages of production- designing and manufacturing. The designing and manufacturing companies are respectively known as ‘fabless’ and ‘foundries’. The company doing both is called Integrated Device Manufacturer (IDM). Silicon, the most widely used semiconductor, is mainly sourced from quartzite, silica sand and quartz vein. Andhra Pradesh and Rajasthan are some of the states where silicon is produced. The late 20th to early 21st century is known as the Silicon Age due to material’s significant impact on modern technology. The evolution of modern electronics is driven by the need of plenty of silicon. Semiconductors are the basic materials needed to make Chips and Integrated Circuits (ICs). A chip is a carrier made of semiconductor material on which multiple electronic components are integrated. These components can be transistors, resistors, capacitors, etc. and are used to perform various circuit functions.
Semiconductors, known as the brains of modern electronics, are essential components of electronic devices, enabling advances in every field of life. Without semiconductors, the technology that we count on everyday would not be possible. These are all around us controlling computers, phones, cars, planes, hospitals, military systems, electronic gadgets in music systems movies productions and countless other applications. Taiwan is the largest producers of semiconductors in the world, China, the USA, Japan, Germany, South Korea, and Isreal are other major contributors in this industry.
In 1960s, a handful of Indian companies were producing germanium. Bharat Electronics Limited (BEL) acquired germanium and silicon technology for producing chips with Hindustan Aeronautics Limited (HAL), for the defence sector. In 1980s, under National Silicon Facility, a new company Metkem Silicon Limited, with the support of BEL, established its polysilicon facilities in Tamil Nadu. India lost the manufacturing momentum in decades since 1990s and fell behind international standards. Indian chip making companies today include Tata Elexi, HCL Technologies, BEL, Vedanta, Dixon Technologies, ASM Tech. To meet the growing demand India imports chips, a trend exacerbated by the global chip shortage from early 2020 to 2023 due to Covid 19 pandemic.
The union cabinet, under the initiative ‘Development of Semiconductors and Display Manufacturing Ecosystem in India’, approved the setting up of three new semiconductor units. Prime Minister Modi virtually laid their foundation on 13th March 24. These units are likely to create direct employment of 20,000 technology jobs and about 60,000 indirect jobs. The plants will be located in Dholera and Sanand in Gujarat and Morigaon in Assam. The Tata group, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Company (PSMC), will setup a plant in Dholera, initially manufacturing 28 nanometre (nm) chips with future plan for 22nm chips. The production is likely to begin in 2026. Another Tata group plant will be established in Morigaon, Assam, the group is developing indigenous advanced semiconductor packaging technologies, including a flip chip and ISIP (integrated system in packaging) technologies. The production in this plant is likely to begin by the end of 2025. And the third plant CG Power, in collaboration with Renesas Electronics Corporation of Japan and Stars Microelectronics of Thailand, will be located in Sanand, Gujarat. Additionally, Micron, a leading American company has committed to build a semiconductor plant in Sanand. On September 5th, India and Singapore signed multiple agreements during PM Modi’s visit to the country, including the area of semiconductor cluster development and the cultivation of talent in its design and manufacturing.
India now has four semiconductor manufacturing facilities, is poised to see a ripple effect that will increase job prospects across various industries including automobile, electronics, telecom, and other industrial sectors. By 2026, this industry in India is anticipated to generate over 300,000 jobs encompassing diverse roles such as testing, engineering, software development, system circuits, validations, and operations. Over the next five years, India has the potential to establish additional facilities in the semiconductor assembly, testing and packaging (ATP) segment. We are moving fast towards Aatmanirbhar Bharat. This expansion aligns with India’s extensive experience in semiconductor design, boasting 20 percent of world’s integrated design workforce. To attract multinational investors seeking stability and predictability, India must continue strengthening recent improvements in its business and policy environment, avoiding measures that could create uncertainty in the business landscape. In order to realise its goal of becoming a significant player in the global semiconductor values chain, India needs to continue wooing high-tech investors and facilitate a pro-R&D environment, offering consistent and transparent financial and tax support as well as cultivation of home talents. According to a research report, the Indian Semiconductor market reached USD 34 billion in 2023 and is projected to reach USD 100 billion by 2032, at a compound annual growth rate of 20 percent. India has the potential in R&D of advanced semiconductor technologies, such as quantum computing, AI chips and 5G infrastructure. These cutting-edge sectors require more advanced chips, which could become a future area of strength for the country.
The increasing production and adoption of electric vehicles is expected to drive up semiconductor demand in areas like safety, electrification, communication, and networking. These units which prioritize developing job prospects and chip designing strength have the potential to completely transform the semiconductor industry. Modern technology is built on semiconductor chips, which are used to power everything from expensive drones to cell phones. At present most of the semiconductor market is dominated by Taiwan, China, USA, South Korea, and Japan. The rising tension between the USA and China over Taiwan, which dominate chip manufacturing, India’s role in this sector will also have strategic importance. The increased production will enhance supply chain resilience not only for India but also for the global markets. With the launch of these units and expecting many more in near future, India can position itself as a global hub for chip manufacturing.
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By Manoj Dubey
Principal (Retd.)
Delhi Public Schools
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