The Union Cabinet sanctioned the creation of a Semiconductor Facility in Uttar Pradesh

The approved unit is a partnership between HCL and Foxconn, which is set to draw an investment of Rs 3,700 crore.

They will collaboratively establish a facility close to Jewar airport in the Yamuna Expressway Industrial Development Authority (YEIDA).

This facility will produce display driver chips for mobile phones, laptops, cars, PCs, and a wide array of other devices equipped with screens.

The facility is engineered to process 20,000 wafers monthly. The capacity for design output is 36 million units monthly.

What exactly is a Semiconductor?

Semiconductors, commonly known as 'chips,' are intricate products to design and produce, offering crucial capabilities for electronic devices to manage, store, and send data.

The chip consists of interconnected transistors, diodes, capacitors, and resistors, arranged on a silicon wafer sheet.

Importance of the project

Job Creation: Semiconductor production plants in India generate numerous direct and indirect job openings.

Decreased Reliance on Imports: Developing additional domestic semiconductor manufacturing will strengthen the nation's self-sufficiency and stability during geopolitical conflicts or interruptions in global supply networks.

Import Dependency: In 2024, India imported semiconductors valued at ₹1.71 lakh crore. Almost 38% originated from China.

Export Prospects: India's semiconductor industry is anticipated to increase from $22 billion in 2019 to $110 billion by the year 2030.

Projected to represent 10% of worldwide chip usage, fueled by demand in smartphones, 5G, electric vehicles, AI, and IoT.

Strategic Significance: Semiconductor chips are essential elements in multiple key sectors including defense, aerospace, and telecommunications.

Possessing a domestic semiconductor sector guarantees enhanced control over the supply chain and minimizes weaknesses to interruptions or external influences.

India's R&D Advantage: India is home to 20% of the globe's semiconductor design engineers.

Enhances expertise and technology in AI, robotics, electric vehicles, precision instruments, and cutting-edge electronics.

Obstacles encountered by India's semiconductor sector

Nations such as the US and EU also recognize the semiconductor potential and have introduced more attractive incentive programs than India.

Significant capital expense: A fab facility may require an investment of over $5–10 billion.

Talent pool: Although India serves as the largest support center for design engineers among all leading chip manufacturers, finding skilled workers who can operate on factory floors of a fabrication plant remains challenging.

Research and Development: India presently falls short in semiconductor design research, which determines the future of the chip.

Power supply: A continuous power supply is crucial to the process, as even momentary fluctuations or spikes can lead to significant losses amounting to millions.

Water demanding: The fabrication of chips needs numerous gallons of ultrapure water daily.

Efforts for the Semiconductor Sector

The India Semiconductor Mission (ISM) seeks to establish a robust ecosystem for semiconductors and displays, establishing India as an international center for electronics manufacturing and design, while acting as the central agency for the effective and smooth execution of semiconductor and display initiatives.

– Production Linked Incentive program: Rewards are being offered for semiconductor design and packaging.

– QUAD Semiconductor Supply Chain Programs: To evaluate the capacity, identify weaknesses, and improve supply chain security for semiconductors and their essential components.