SEMICONDUCTOR INDUSTRY (CHIP WAR)

If I have to write about the emerging technologies which will be on the driving seat in the future, it will be

Artificial Intelligence (AI)

Internet of Things (IOT)

5G Technology

It is interesting to know that all these future oriented technologies depend on the semiconductor chip to collect, process and transmit data. Today everything from missiles to smartphones, stock market, computers, consumer electronics, runs on semiconductors.

Its not surprising that semiconductor industry’s worldwide sale which was 556 billion US Dollar in 2021 reached to 574.1 billion US Dollar by the end of 2022. The semiconductor industry is projected to have an expected compound annual growth rate (CAGR) of 12.2 % between 2022 and 2029. A 2020 study by SIA and the Boston Consulting Group found that global demand for semiconductor manufacturing capacity is projected to increase by 56% by 2030.

India doesn’t have any chip manufacturing plants but semiconductor industry is in top priority list of the present government. Government will offer incentive schemes of worth Rs 76,000 crore for Research and manufacturing & will also offer a 30 percent subsidy for testing, and packaging facilities of semiconductor chips.

According to the India Electronics & Semiconductor Association (IESA) India’s semiconductor market was 22.7 billion US Dollar in 2019. Report projects three time growth in India’s semiconductor market to value about 64 billion US Dollar by 2026. Report in Outlook puts India’s semiconductor market on course to be worth 80.3 billion US Dollar by 2028.

ISMC Digital, a consortium of investors, is planning to build a 3 billion Dollar manufacturing facility in India. Tower Semiconductor, an Israeli company, would be the technology partner on that project.

The central government will invest 1.2 billion US Dollar to modernize the 30-year old facility at the Semiconductor Laboratory (SCL) in Mohali (Punjab state) to achieve volume production and create profitable assets.

SCL presently has the capability to produce 8-inch CMOS microchip wafers used mostly in the country’s strategic areas like the space program (Mangalyaan and the Mars Orbiter Mission). The government’s investment is part of the India Semiconductor Mission’s goal to modernize and commercialize the facility.

The Semiconductor Design-Linked incentive scheme has so far onboarded 27 start-ups, as per the Ministry of Electronics and Information Technology (MEIT).

Now lets focus on chip war going between two major players of semiconductor industry, China and United State America. Defence applications are likely one of the major reasons behind this war. The tense relation between China and Taiwan open the flood gate for US who committed 52 billion US dollar to semiconductor manufacturing and research in 2022 with the CHIPS and Science Act. Taiwanese chip giant TSMC decided a huge investment of 40 billion dollars in the US for manufacturing three and five-nanometre chips which are the most advanced generations.

While China which spends more money importing chips than any other product is heaping billions into a chip-building initiative to catch the US’s lead. China wants to unstable America’s economic prosperity and military superiority.

India has an edge in this war due to its huge domestic consumption market. India also has lots of English-speaking engineering talent and cheaper labour which attracts chip giants to invest in India.

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SEMICONDUCTOR INDUSTRY (CHIP WAR)