UPSC Mains 2025 GS3 Q16: model answer

Semiconductors run everything from phones to missiles. India imports almost all its chips, and global supply shocks during COVID-19 showed the risk.

Challenges

• Capital: a modern fab costs billions of dollars and takes years to break even.
• Technology: leading-edge know-how is held by a few firms (TSMC, Samsung, Intel).
• Infrastructure: need for uninterrupted power and ultra-pure water in large volumes.
• Supply chain: specialty gases, chemicals, equipment all imported.
• Skills: India has many chip designers but few fab engineers.
• Competition: US CHIPS Act, EU and East Asian subsidies.

India Semiconductor Mission (ISM)

• Set up in December 2021 under the Ministry of Electronics and IT with an outlay of ₹76,000 crore.
• Up to 50% fiscal support for fabs, display fabs, compound semiconductors and ATMP/OSAT units, with State support on top.
• Design Linked Incentive scheme for start-ups and chip design.
• Modernisation of the Semi-Conductor Laboratory, Mohali.
• Skilling through Chips to Startup programme.

Progress

• Micron's ATMP plant at Sanand; Tata Electronics with PSMC building a fab at Dholera; Tata, CG Power and Kaynes OSAT units.
• About ten projects approved by 2025; first domestically packaged chips expected in 2025.

India can begin with mature nodes and packaging, where demand is large, and climb up gradually. Steady policy over a decade is the real requirement.