India aims to become a semiconductor manufacturing hub. What are the challenges faced by the semiconductor industry in India? Mention the salient features of the India Semiconductor Mission.
India's ambition to become a semiconductor manufacturing hub faces several formidable challenges. The foremost is the extremely high capital investment required to set up a fabrication plant (fab), which runs into billions of dollars. The industry demands an uninterrupted supply of ultra-pure water and stable, high-quality power, which can be a logistical challenge in India. There is also a significant shortage of a highly skilled workforce with specialized expertise in semiconductor design, fabrication, and testing. Furthermore, the global semiconductor supply chain is complex and dominated by a few countries, making it difficult for a new entrant to break in. The lack of a robust domestic ecosystem for raw materials, specialty chemicals, and manufacturing equipment is another major hurdle.
To address these challenges, the government launched the India Semiconductor Mission (ISM) with a significant financial outlay. Its salient features include providing substantial fiscal support for setting up semiconductor and display fabs. The government is offering up to 50% of the project cost as a subsidy to attract global players. The mission also provides financial incentives for setting up compound semiconductor units and for packaging and testing (ATMP) facilities. A key feature is the Design Linked Incentive (DLI) scheme, which aims to nurture at least 100 domestic companies in semiconductor design, fostering a vibrant fabless ecosystem. The mission also emphasizes long-term strategies for skill development and research and development to build a sustainable and self-reliant semiconductor industry.
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Sarvesh Jha
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Important Questions from GS3
Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth?
What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
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What were the factors responsible for the successful implementation of land reforms in some parts of the country? Elaborate.
