Some call it the heart, others the brain, of modern gadgets. Either description serves to illustrate the central role semiconductor chips play in making life easier, driving economic activity and furthering innovations for the digital future. But for something that the entire world relies heavily on, the semiconductor production ecosystem is surprisingly, some will say, alarmingly, constricted, with only a handful of countries with capabilities to design or manufacture them. Amid the pandemic, a shortage of chips has seen production suffer across industries, underscoring the need to diversify the production of this essential item. Looking to emerge as a major semiconductors player, India has lined up a Rs 76,000 crore package to attract knowhow and investment in the sector. Heres all you need to know.
Never before has such a tiny item had so massive an influence on global business as semiconductor chips have come to exert in our digital age. Most electronic devices and new cars that are produced use it to execute their functions while everything from gym equipment to gaming consoles rely on it, not to mention most household appliances and personal devices.
In short, any device, gadget, item or product that features electronic displays, or needs to process data depends essentially on these chips. The industry, which saw total sales of USD 440.4 billion in 2020, is expected to see earnings grow by a fifth this year to touch USD 527.2 billion. This, amid a crippling shortage of chips that will see carmakers worldwide produce millions of fewer cars this year while electronics giant Apple said shortages will hurt the sales of iPads and iPhones this year.
It all boils down to electrical properties. Anything that conducts electricity is called a conductor, and one that doesnt is called an insulator. Semiconductors are substances with properties somewhere between them," says Japanese major Hitachi.
Such as they are, says US-based industry body Semiconductor Industry Association (SIA), semiconductors are the brains of modern electronics and technologies of the future such as artificial intelligence, quantum computing, and advanced wireless networks".
Semiconductors also known as integrated circuits (ICs), or microchips are most often made of silicon or germanium, or a compound like gallium arsenide. The process kicks off with the introduction, into these pure elements, of impurities with the goal of achieving crucial changes in the conductivity of the material. This step is known as doping.
As SIA says, most semiconductors start off as sand which, after being processed, is melted into solid cylinders called ingots. These ingots are thereafter sliced into extremely thin pieces disc, which in turn are polished to a flawless finish". This is a blank wafer. This blank wafer, in the next step, is printed with the intricate circuit design as they move to the stage where they become separate chips, which happens through cutting them up into tiny individual semiconductors called dies.
The dies are then built into finished semiconductors and take the familiar shape in which they are finally inserted into devices.
This was the mechanical part of producing a semiconductor chip and is accomplished in what is known as a foundry. But the true art in making semiconductor chips lies in devising and designing them, involving everything how the chip should operate, how the circuit needs to be laid out to achieve that objective and including testing and verification to check that the chip does what it was meant to be.
A single firm that performs all the above steps is called an integrated device manufacturer (IDM), but the bulk of the business operates via a system where what is known as a fabless firm designs the chip and then outsources its production to a foundry.
Fabless companies more often than not are located in the developed nations that can afford high investments in R&D while foundries are most likely to come up in countries where labour is abundant and cheap so as to keep production costs low, like Taiwan the worlds largest chipmaker and China.
Mainly Covid, as the pandemic it has wrought disrupted economic activity, shut down factories and businesses and froze global supply chains.
As tech major IBM pointed out, the sudden, remote work-induced increase in the sales of consumer-electronic products worked as a double whammy in combination with a slowdown in chip production. But as an article in Money Control notes, Covid-19 was not the only factor behind the shortage and the tense relationship between the US and China" also played a part. As the US blacklisted Chinese companies, American firms had to look elsewhere for chips, something that also served to trigger shortages.
The sudden chip crunch and the debilitating impact it had on all kinds of industries The Washington Post said that a company in Illinois in US that makes electronic dog-washing booths, too, was hit by the shortage sent a shudder down strategic and policy circles, sparking efforts to resolve supply chain issues and bottlenecks. The idea was to ensure that no one country played an outsize role in the semiconductor business.
With Chinas increasingly assertive stance vis-a-vis Taiwan, which Beijing considers part of its territory, there was an added push to diversify chip production. So much so that one of the stated goals of the Quad alliance of the US, Japan, Australia and India is to launch a joint initiative to map capacity, identify vulnerabilities, and bolster supply-chain security for semiconductors and their vital components".
According to a March 2021 article on indiaai.gov.in, an initiative of the Ministry of Electronics and Information Technology (MeitY) and Nasscom, semiconductors are a 100 per cent import sector" in India. However, it noted that India has a distinct advantage in chip design" with several global IDMs having established design centres in India. It cites MeitY to add that India produces nearly 2,000 chips every year and more than 20,000 engineers in the country are involved in chip design".
But India is nowhere yet on the global semiconductor radar. As SIA notes, the US is the worldwide leader in semiconductors with about half of global market share and sales of USD 208 billion in 2020". As IEEE notes, the worlds leading semiconductor manufacturers are located in the US which has four of the five global leaders: Intel, NVIDIA, Broadcom, Texas Instruments Inc. (not in that order) and the Asia-Pacific region, where South Korea is home to a top-five player in Samsung.
The reason the semiconductor industry is dominated by global giants" is due in part to the enormous scale of the market and the costs of manufacturing integrated circuits and researching new technology", adds IEEE.
MeitY told Parliament in December this year that semiconductor FABs are highly capital intensive and resource intensive, and are at the cutting edge of manufacturing with rapidly changing technology cycles". It acknowledged further that the semiconductor fabrication capability for leading/cutting edge technology nodes is available with only few companies
globally".
On December 15, the government came up with a Rs 76,000-crore package for development of semiconductors and display manufacturing ecosystem in India", announcing incentives of Rs 2.3 lakh crore to position India as global hub for electronics manufacturing with semiconductors as the foundational building block".
Stating that the establishing domestic capabilities in semiconductor production will have a multiplier effect across different sectors of the economy [and] promote higher domestic value addition in electronics manufacturing", it said that the success in this area will contribute significantly to achieving a USD 1 trillion digital economy and a USD 5 trillion GDP by 2025".
The scheme is aimed at providing a push to semiconductor and display manufacturing by enabling access to capital support and technological collaborations for companies engaged in production of everything from silicon semiconductor fabs, display fabs, validation, assembly and testing and design.
Read all the Latest News, Breaking News and Coronavirus News here.
Read more here:
EXPLAINED: Wafers, Chips And How India Is Eyeing A Slice Of The Semiconductor Pie - News18
- QazInnovations: Kazakhstan seeks to bring volume of innovative ... - inform.kz/en - April 23rd, 2023 [April 23rd, 2023]
- World Earth Day: What is green finance, and why do we need it so much? - The Economic Times - April 23rd, 2023 [April 23rd, 2023]
- Netarts Bay cleanup scheduled for Earth Day with SOLVE and ... - Tillamook Headlight-Herald - April 23rd, 2023 [April 23rd, 2023]
- Shaping humanitarian and ethical governance in Pakistan - The Express Tribune - April 23rd, 2023 [April 23rd, 2023]
- Remarks by Secretary of the Treasury Janet L. Yellen on the U.S. ... - Treasury - April 23rd, 2023 [April 23rd, 2023]
- Investing in nature: Building local economies through conservation - McKinsey - April 23rd, 2023 [April 23rd, 2023]
- Lalith's economic vision for Lanka: Export or perish - The Sunday Times Sri Lanka - April 23rd, 2023 [April 23rd, 2023]
- Alliance for an Energy Efficient Economy to help A.P. govt. implement energy-efficiency projects - The Hindu - April 23rd, 2023 [April 23rd, 2023]
- President Biden Announces Key Appointments to Boards and ... - The White House - April 23rd, 2023 [April 23rd, 2023]
- A Restraint Approach to U.S.China Relations: Reversing the Slide ... - Quincy Institute for Responsible Statecraft - April 23rd, 2023 [April 23rd, 2023]
- Carrollton Mayor and City Council Election Preview 2023: Meet your ... - Star Local Media - April 23rd, 2023 [April 23rd, 2023]
- Governor Kelly Signs Bipartisan Bill to Expand Teacher Workforce in ... - Kansas Governor - April 23rd, 2023 [April 23rd, 2023]
- Indigenous Peoples Must Have Full Representation, Participation in ... - United Nations - April 23rd, 2023 [April 23rd, 2023]
- The EPA Region 6 Announces a Total of $23 Million to ... - U.S. EPA.gov - April 23rd, 2023 [April 23rd, 2023]
- Kansas governor strikes funding for anti-abortion pregnancy centers ... - Kansas Reflector - April 23rd, 2023 [April 23rd, 2023]
- Can You Fight for Climate Justice Without Being Antiwar? - Common Dreams - April 23rd, 2023 [April 23rd, 2023]
- Sustainable Tourism: A World leading to the road of Environment consciousness - Nomad Lawyer - NomadLawyer - April 23rd, 2023 [April 23rd, 2023]
- Atlanta's Cop City and the Struggle for Climate Justice - Resilience - April 23rd, 2023 [April 23rd, 2023]
- Jaishankars visit to Uganda, Mozambique went almost unnoticed but it indicated Indias bold gambit in Africa - Firstpost - April 23rd, 2023 [April 23rd, 2023]
- Natural resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Non-renewable resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Minister Wilkinson Launches Phase 2 of the Regional Energy and Resource Tables - Canada NewsWire - October 13th, 2022 [October 13th, 2022]
- Executive Secretary participates in Russian Energy Week to advocate for decarbonization in the UNECE region ahead of COP27 - UNECE - October 13th, 2022 [October 13th, 2022]
- Renault Group: The Future Is NEUTRAL: The circular economy is stepping into a new era! - Yahoo Finance - October 13th, 2022 [October 13th, 2022]
- Economy Expected to Contract Further in 2023, as the Fed Appears Resolved to Tame Inflation - PR Newswire - October 13th, 2022 [October 13th, 2022]
- Brazils Runoff Election Will Have Enormous Effects on the Global Climate Crisis - Truthout - October 13th, 2022 [October 13th, 2022]
- Health disparities and health inequalities: applying All Our Health - GOV.UK - October 13th, 2022 [October 13th, 2022]
- Opinion: Biopolitics is the invisible hand shaping mental health - The Connecticut Mirror - October 13th, 2022 [October 13th, 2022]
- Avaaz urges Georgieva and Trudeau to lasso-in commitments from IMF to attend December's vital UN Biodiversity Talks in Montreal - GlobeNewswire - October 13th, 2022 [October 13th, 2022]
- Kochi as a global city? Why not, asks the man behind Ahmedabads mega city story | Manorama English - Onmanorama - October 13th, 2022 [October 13th, 2022]
- Hennessy and Thurgood Marshall College Fund Announce partnership with Group Black and The Bishop Gallery to make "America's Most Influential... - October 13th, 2022 [October 13th, 2022]
- Pollution Prevention Week highlights ways to reduce, reuse and recycle waste - Michigan (.gov) - September 22nd, 2022 [September 22nd, 2022]
- England headed for incineration overcapacity, warns UKWIN - Resource Magazine - September 22nd, 2022 [September 22nd, 2022]
- 3 years of the Principles for Responsible Banking: our vision for change United Nations Environment Finance Initiative - UNEP Finance Initiative - September 22nd, 2022 [September 22nd, 2022]
- Isn't It Time To Challenge The Growth Paradigm? OpEd - Eurasia Review - September 22nd, 2022 [September 22nd, 2022]
- Coalition of Nearly 50 Organizations Launches 'Tear the Paper Ceiling' Campaign to Raise Awareness Around the 70+ Million Workers in the U.S. Skilled... - September 22nd, 2022 [September 22nd, 2022]
- Remote work can actually be more productive: More Hub readers respond to the work-from-home phenomenon - The Hub - September 22nd, 2022 [September 22nd, 2022]
- Mendocino Public Health on record-setting Sept. heat: We can't just treat this as a once-in-15-years occurrence - The Mendocino Voice - September 22nd, 2022 [September 22nd, 2022]
- Carbon Ridge Secures $6 Million Investment from Leading Climate Investors and Maritime Industry Leaders - Business Wire - September 22nd, 2022 [September 22nd, 2022]
- Regenerative Travel Is the Next Phase of Responsible Tourism - Outside Online - Outside - September 22nd, 2022 [September 22nd, 2022]
- NNPC: Between rebranding and reforms, By Tijah Bolton-Akpan - Premium Times - September 22nd, 2022 [September 22nd, 2022]
- Embodying the spirit of Malaysia - The Edge Markets MY - September 22nd, 2022 [September 22nd, 2022]
- Nonprofit executive takes on state-appointed economic development role - MiBiz: West Michigan Business News - August 29th, 2022 [August 29th, 2022]
- Noble Mineral Exploration Signs Exploration Agreement with the Constance Lake First Nation - Junior Mining Network - August 29th, 2022 [August 29th, 2022]
- China and the Democratic Republic of the Congo: A Progressively Deepening Bilateral Partnership - The Geopolitics - August 29th, 2022 [August 29th, 2022]
- Oil money is flooding into Guyana. Who will benefit? - Reuters - August 29th, 2022 [August 29th, 2022]
- Remote-work revolution exposes need for better data, tracking tools to evaluate workforce, pay and economy - The Spokesman Review - August 29th, 2022 [August 29th, 2022]
- We need rare earth elements for a greener future, but there's a catch - CBC.ca - August 29th, 2022 [August 29th, 2022]
- BRNHA the steward of the living traditions of WNC: Opinion - Citizen Times - August 29th, 2022 [August 29th, 2022]
- The Fiji Times Back in history: Future of forestry sector - Fiji Times - August 29th, 2022 [August 29th, 2022]
- Hochul announces grand opening of Capital Region BOCES Career and Technical Education Center - Troy Record - August 29th, 2022 [August 29th, 2022]
- Predicting the Future of Greenhouse Gas Emissions - Columbia University - August 15th, 2022 [August 15th, 2022]
- JD.com Ranks 46th on 2022 Fortune Global 500 - Yahoo Finance - August 15th, 2022 [August 15th, 2022]
- Minister Wilkinson Releases New Report Showing the Impacts of Climate Change and Necessity of Climate Adaptation in Ontario - Canada NewsWire - August 15th, 2022 [August 15th, 2022]
- Do Armenians have a future as an independent nation? Part 4 - Armenian Weekly - August 15th, 2022 [August 15th, 2022]
- Getting the diagnostics right 2 - BusinessWorld Online - August 15th, 2022 [August 15th, 2022]
- GrammaTech and T.E.N. Announce Call for Nominations for Product Security Executive of the Year Awards - Business Wire - August 15th, 2022 [August 15th, 2022]
- Energy Vault and Jupiter Power Announce Agreement for Battery Energy Storage Projects in Texas and California Totaling 220 MWh - Business Wire - August 15th, 2022 [August 15th, 2022]
- The North East LEP: Thinking bigger and planning together for the future - Bdaily - August 15th, 2022 [August 15th, 2022]
- It's not enough to buy American. You also need to sell American all around the world. - The Ripon Society - July 27th, 2022 [July 27th, 2022]
- Bid to designate 50k acres in UP as wilderness highlights tension over public lands - MLive.com - July 27th, 2022 [July 27th, 2022]
- A 'Living Wall' At Texas A&M Could Be The Key To Smarter Cities - Texas A&M University Today - July 27th, 2022 [July 27th, 2022]
- Architects and designers must embrace the circular economy - Project Scotland - July 27th, 2022 [July 27th, 2022]
- Strategic Minerals increases Tin and Tantalum production in June and Q2 2022 at its Penouta Mine - Yahoo Finance - July 27th, 2022 [July 27th, 2022]
- Issues of the Environment: Improving recycling rates and quality of recycling materials in Washtenaw County - WEMU - July 27th, 2022 [July 27th, 2022]
- Joe Oliver: The Liberal Cabinet Needs an Intervention - The Epoch Times - July 27th, 2022 [July 27th, 2022]
- SDG&E and Cajon Valley Union School District Flip the Switch on Region's First Vehicle-to-Grid Project Featuring Local Electric School Buses Capable... - July 27th, 2022 [July 27th, 2022]
- Reimagining business: The greatest debt of all time - Newsroom - July 13th, 2022 [July 13th, 2022]
- Moody's affirms A1 rating of Newfoundland and Labrador, changes outlook to stable - Moody's - July 13th, 2022 [July 13th, 2022]
- New Mexico's oil and gas revenues are breaking records and complicating budgets - New Mexico Political Report - July 13th, 2022 [July 13th, 2022]
- FACT SHEET: White House Announces over $40 Billion in American Rescue Plan Investments in Our Workforce With More Coming - The White House - July 13th, 2022 [July 13th, 2022]
- The Class of 2022 Is Ready to Workon Their Terms - SHRM - July 13th, 2022 [July 13th, 2022]
- Faraday Copper Announces Updated Mineral Resource Estimate for the Copper Creek Project in Arizona; Measured and Indicated Mineral Resources Exceed... - July 13th, 2022 [July 13th, 2022]
- Inside the Triangle's latest job opening data: What boards are showing and who's hiring - WRAL TechWire - July 13th, 2022 [July 13th, 2022]
- Reserve Bank keeps blinkers on inflation, raising OCR to 2.5% - Stuff - July 13th, 2022 [July 13th, 2022]
- Abe's drive to bring back Japan | The Interpreter - The Interpreter - July 13th, 2022 [July 13th, 2022]
- UCF Hospitality Researchers Expertise Is Tapped for Global Sustainable Tourism Report - UCF - June 30th, 2022 [June 30th, 2022]
- Feminist Economics and the Fight for Human Rights - OHCHR - June 30th, 2022 [June 30th, 2022]
- Biden Administration announces historic coastal and climate resilience funding - National Oceanic and Atmospheric Administration - June 30th, 2022 [June 30th, 2022]
- Why green ammonia will be the workhorse of EU's future hydrogen economy - EURACTIV - June 30th, 2022 [June 30th, 2022]