India first semiconductor plant coming up in Gujarat

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How Semiconductors are going to be the Game changers for India? A Major semiconductor factory is going to be set up in Gujarat. I will be clarifying this in this article.

Vedanta, which is a major investor in the Gujarat factory, its chairman says that as soon as the factory is built, a 1 lakh-priced laptop will decrease to 40thousand.

India first semiconductor plant  coming up in Gujarat

What is Semiconductor?

In very simple words semiconductors are like the brains of electronic devices. 

As we know,  conductors conduct electricity and insulators resist electricity. 

In the making of Integrated circuits IC and PCB, both conductors and insulators are used.

Circuits made using these will be quite large.  

But semiconductors are those materials that can do both the work of conductors and insulators, as it consist of millions of very small transistors which can perform any logical operations. If we interpret these data in simple terms we found that semiconductors are the core of modern economics.

Use of Semiconductors.

They are so important as at present no device comes without the use of semiconductors. all from TV, smartphones, AC, automobiles, ATM cards, door Bells, light bulbs even watches. 

globally every year around 1 trillion semiconductors are manufactured,  so it's No Surprise that in 2021 Global semiconductor chip production has become a 530 billion dollar industry.

Benefits Of Semiconductor factory in India

Well, the question is if a semiconductor factory is set in Gujarat then what will be my profit,

well in India electronic devices prices will be going down,

As earlier mentioned that Vedanta’s chairman says that 1 lakh priced laptops will decrease to 40 thousand. 

Just put it in the context of India, Electronics are constantly rising in India,

 23% of the urban population has access to computers, and 4% of people have access to computers in rural areas 

but 3 crore students have no access to electronic devices.

Just Imagine how much it would be beneficial to the growth and development of India.

 For example When the internet rolls out in India so many people benefit from it and now if a semiconductor factory is established then electronics would be cheap then imagine so many people will be blessed especially students who cannot afford such devices. 

Current semiconductor market in India.

If we talk about till date India imports 100% of superconductor chips. 

The Indian semiconductor market was valued at $27.2 billion in 2021 and is expected to grow at nearly 19% to reach $64 billion in 2026. But none of these chips is manufactured in India so far.

India spends almost 27.2 billion dollars just to buy semiconductors from countries like China, Singapore, Hong Kong, Japan, and the United States.

So the picture is a country with a 138 Crore population and electronic market size of 73.7% billion dollars has only 2% semiconductor factories situated and unfortunately, to be honest, they are not as par with the advancing Technology standards. 

For example superconductor laboratory of HCL situated in Mohali manufactures Shakti processor of 180 nm, As the rest of the world is moving towards smaller and more efficient, 

it's just to give you an idea of the smartphones we use today that this processor has  5 to 22 nm range chips. So you can see Indian Technology is far redundant.


Why India Left behind

Now you may wonder why India is not self-sufficient in such an important industry?

The answer is that Indian companies were not investing in these Industries as returns are not immediate. It comes over a long period of time so to fulfill domestic needs they conveniently import from outside.

The Indian government charges more tariffs on electronics so The price of imported items increases. For this reason, domestic products Demand automatically Rises and also companies have no pressure to decrease the price, in this friendly environment for companies where they would develop competitive Spirits among them.

So Big foreign companies avoid setting up semiconductor factories in India and also tech company like Intel and SanDisk clearly says that India lacks infrastructure and government funding So for these reasons they have no plan to set up any factory in India 

and then cut to now Global companies like Foxconn are investing in India, Their reason for investment is simple to supply the ever-increasing demand for hardware as we are all time surrounded with Technologies Which are going to be more efficient with the help of quantum computing nanotechnology robotics and even 5G Which Are going to boost the daily productivity 

Global chip shortage 

but in 2020 World faces a global chip shortage it happens as when all the countries were under lockdown, initially demands for electronics and automobile commodities decrease, and factories in manufacturing canceled semiconductor chips orders As a result semiconductor manufacturing factories also slow down their production but then As lockdown was opened the demand for semiconductors spikes When demand recovered faster than anticipated in the second half of 2020.  and all the Chip manufacturer companies together could not fulfill the demand.

Also, governments of different nations realise that the semiconductor is a product of strategic importance, and diversifying its supply is urgently needed.

looking at the necessity of semiconductors in the country Indian government decided to set up their own factories

Process of making semiconductors.

Handful countries manufacture semiconductors , the reason is that semiconductor is only small at the look but the process of making much Complex and multi-staged, 

in the simple, first step for that designing that's obvious in Making of building firstly it is designed same is which semiconductor chips firstly it is designed on software and the designing company are called fabless and Israel is a world leader in chip designing.

Second step is manufacturing and mind you  this is the most difficult step. companies Which manufacture motherboards are called foundries And This sector is dominated by Taiwan, 73% of the manufacture of motherboards done by Taiwan and 13% in the United States. 

A final step is the Assembly All parts are compiled to an Integrated circuit IC.

Problems in making

  no, any country, till the date does all the steps in their own and hence doesn't become self-sufficient in this industry and some major reasons behind this, are

 -> the biggest number one is the power supply semiconductor foundry requires per hour round 100 MW hours of power which is more than any refinery, or automobile industry.

  ->And number 2 is water, one semiconductor plant has a daily minimum water requirement is about 2 million gallons of water .

let me tell you if in India 9 crores people doesn't have basic water supply similar situations faced by several foreign countries 

  -> 3rd is finance, running a semiconductor factory requires huge capital investment as to setup factory  at least 3 to 4 billion dollars 

  -> number 4 is sanitation requirements. It is a highly sophisticated process that even microparticles can disturb whole  Silicon boards. 

We know India already lacks power  and water supply , which is also one of the reasons why is production has been relaxed

India Steps towards Semicon Plants

 but India is leading countries in design already,

In the whole world semiconductor engineers, 20% are  Indians, 2000 integrated circuits chips are Designed in India.To improve designing capabilities or to develop skills universities are including super conductor-related studies as we are leading in the first step then why not jump in the second space and fulfil this ecosystem and to fulfil the demand-supply and to invite foreign companies in India we  truly need to setup a full-fledged semiconductor ecosystem.

And to achieve this, the Indian government in 2021 launched the SemiconIndia program.

For setting up semiconductor designs component and display fabrication units in India govt allotted 76000 crore rupees.The plans is to set up 20 semiconductor plants in the coming 6 years but the Gujarat semiconductor plant is not the only one, there are more to come.

Due to these schemes, not only Foxconn but other big International companies are attracted to India. As like in  Karnataka to set up plant International semiconductor Consortium ISMC will be investing 3 billion dollars which creates 1500 direct and 10,000 indirect jobs. and even in Tamilnadu IGSS which is a Singapore-based company willing to invest 25600 Crores for the plant in this project 5000 direct employment will be generated.

Make in India

Lastly, on the other front, electronic products use glass or display so along with semiconductors display manufacturing units will also be set up. The big news is that Apple is going to manufacture iPhones in India for local and global supply. Samsung is setting up a display manufacturing plant in India 

However, India is late in this facility but this is a significant step in Make In India mission this will decrease its dependence on electric imports.

Wrapping Up

Hence if semiconductors are manufactured in India then the price of electronic will decrease obviously due to no import duty. Indian Semiconductor market whose value is about 27 billion dollars 19% in growth rate increased to a 64 billion dollar industry by 2026.

Semiconductor factory in Gujarat is a great sign of progress for the whole Nation.

But do you know until July 2020  this Plant was to be established in Maharashtra but at the last moment the project was shifted to Gujarat.

Gujarat government offered a capital subsidy of 30% and power tariff subsidy of one rupee per unit which was actually better than 25% capital subsidy and 3 rupees per unit subsidised power. 

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