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Establishment of Semiconductor Units

Why is it in the news?

  • The Indian Cabinet has approved the establishment of three semiconductor units as part of the “Development of Semiconductors and Display Manufacturing Ecosystems in India”

These units include:

  • The Semiconductor Fab will be established in Dholera, Gujarat, in partnership with companies from Taiwan.
  • Semiconductor ATMP (assembly, testing, marking, and packaging) unit will be set up in Morigaon, Assam.
  • A specialized Semiconductor ATMP unit for specialized chips will be established in Sanand, Gujarat, in partnership with companies from Japan and Thailand.


About Semiconductor Industry

·       Semiconductors, also known as integrated circuits (IC), possess properties between conductors and insulators.

·       A semiconductor fab, or fabrication plant, manufactures integrated chip circuits and silicon wafers, which are crucial components in electronics such as diodes, transistors, and integrated circuits.

·       Semiconductors are integral to various electronic devices and emerging technologies like AI, 5G, and IoT.

·       The global semiconductor industry is projected to reach a trillion-dollar valuation by 2030, according to McKinsey.

·       The United States, Taiwan, and China are recognized as semiconductor powerhouses.

·       Deloitte forecasts the Indian semiconductor market to achieve a valuation of US$ 55 billion by 2026.





  • The establishment of these semiconductor units aligns with India’s goal of developing a robust semiconductor and display manufacturing ecosystem.
  • It aims to reduce dependency on imports and foster indigenous production of semiconductor components, contributing to India’s self-reliance in the electronics sector.
  • This initiative is expected to generate employment opportunities, promote technological innovation, and bolster India’s position in the global semiconductor market.


Government Initiatives 

·       National Policy on Electronics (NPE): India has launched the National Policy on Electronics (NPE) in 2019, with the aim of creating a globally competitive electronics manufacturing industry in the country.

·       Semicon India Program: The Union Cabinet had also approved the Semicon India Program, with an outlay of INR 76,000 crore for the development of a sustainable semiconductor and display manufacturing ecosystem in India.

·       India Semiconductor Mission (ISM):

ISM was launched in 2021 under the aegis of the Ministry of Electronics and IT (MeitY) for the development of a sustainable semiconductor and display ecosystem in the country. Its components include

·       Scheme for setting up of Semiconductor Fabs in India

·       Scheme for setting up of Display Fabs in India

·       Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India.

·       Design Linked Incentive (DLI) Scheme: It offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.

·       Foreign Direct Investment (FDI) Norms: 100% FDI is allowed under the automatic route.

·       The “Make in India” campaign and the Electronics Manufacturing Cluster (EMC) scheme aim to attract investments and promote semiconductor manufacturing in the country.


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