Cabinet Clears 4 Semiconductor Projects under ISM

Why in the News?

1. The Union Cabinet has approved four new projects under the India Semiconductor Mission (ISM), with a total investment of ₹4,594 crore.
2. These projects aim to strengthen India’s semiconductor manufacturing and packaging ecosystem under the ₹76,000-crore ISM scheme.
3. The development marks a major step toward achieving self-reliance in chip manufacturing, a critical component of India’s electronics and digital economy.

Key Highlights

1. What is semiconductor?
   A semiconductor is a material with electrical conductivity between a conductor and an insulator.
2. Need for domestic manufacturing of semiconductors
   1. Foundation stone of modern electronics industry
      1. These are critical components that power electronics – from computers and smartphones to the brake sensors in cars.
   2. To reduce import dependency
      1. As India does not produce much semiconductors, the country’s demands are met with imports.
      2. The demand for semiconductors in India will increase in future.
   3. To overcome the disruption in supply-chain
      1. The absence of local manufacturing affected India the most during the lockdown imposed due to the Covid-19 pandemic.
   4. Geopolitical significance
      1. In the current geopolitical scenario, trusted sources of semiconductors hold strategic importance.
      2. These are key to the security of critical information infrastructure.

• E.g., The Department of Telecommunications has in the past raised concerns over possible bugs in the telecom equipment sold by the Chinese company.

3. Approval of Four Projects
   1. Two projects will be established in Bhubaneswar, Odisha, and one each in Punjab and Andhra Pradesh.
   2. The cumulative value of these projects is ₹4,594 crore.
4. Companies and Their Focus Areas
   1. SiCSem: Will set up a silicon carbide integrated facility in Info Valley, Bhubaneswar.
   2. Continental Device India Pvt. Ltd.: Expansion of its existing discrete semiconductor manufacturing facility in Mohali, Punjab.
   3. 3D Glass Solutions Inc.: Will create a vertically integrated advanced packaging and embedded glass substrate unit in Bhubaneswar.
   4. ASIP Technologies: Plans a semiconductor unit in Andhra Pradesh, location yet to be finalized.
5. Strategic Importance of Silicon Carbide Technology
   1. Silicon carbide is an evolving technology critical for high-power and high-efficiency electronics.
   2. India’s IIT Bhubaneswar has already invested ₹45 crore in silicon carbide research, with promising results.
6. India Semiconductor Mission’s Role
   1. ISM provides financial support to semiconductor units to build a sustainable domestic chip ecosystem.
   2. With these approvals, 10 projects are now under ISM, including the previous six units announced earlier.
7. Expected Output
   1. The first semiconductor chip from previous projects is expected by the end of this year, signaling early progress under the mission.

Implications

1. Boost to Domestic Semiconductor Manufacturing
   1. Reduces dependence on imports and strengthens India’s position in the global chip market.
   2. Encourages indigenous innovation and R&D in high-tech sectors.
2. Strategic and Economic Significance
   1. Enhances technological sovereignty in a sector crucial for electronics, defense, EVs, and 5G.
   2. Supports Make in India and Digital India initiatives.
3. Regional Development
   1. Bhubaneswar, Mohali, and Andhra Pradesh will see increased industrial activity and job creation.
   2. Helps develop semiconductor clusters in emerging tech hubs.
4. Global Competitiveness
   1. Positions India as a key player in the global semiconductor supply chain, reducing reliance on East Asian markets.
   2. Attracts foreign investments and partnerships for advanced technologies.
5. Long-term Economic Impact
   1. Creates a value chain for electronics manufacturing, from design to packaging.
   2. Provides employment opportunities for skilled engineers and researchers.

Challenges and Way Forward

Conclusion

The approval of four new semiconductor projects under ISM is a major step toward achieving Atmanirbhar Bharat in the high-tech sector. It will boost manufacturing capacity, attract investment, and create jobs while strengthening India’s strategic position in global technology supply chains. However, timely implementation, skill development, and R&D support will be key to sustaining this momentum.