Syllabus
GS Paper 1 Factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India).
GS Paper 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation
GS Paper 3 Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth; indigenization of technology and developing new technology.
Applications where to apply?
When asked about
– India’s Semiconductor Industry
– Semiconductor working and applications
– Design Linked Incentive Scheme
– Economic Development: Dollar 5 trillion economy
Context
The article discusses the challenges and potential of India’s Design-Linked Incentive (DLI) scheme. This program aims to establish India as a major player in the global semiconductor industry.
Source
The Hindu | Editorial dated 24 January 2024
The need to overhaul a semiconductor scheme
Semiconductors are crucial components in almost all modern electronic devices, from smartphones to medical equipment to military technology. Design-Linked Incentive (DLI) scheme, provides financial and infrastructure support to companies designing semiconductors in India.
Science behind Semiconductor
- Atomic Structure and Conductivity:
- Semiconductors, like silicon, have atoms with four valence electrons in their outer shell. These electrons form covalent bonds with neighboring atoms, creating a strong crystal lattice. In this perfect state, the material has no free electrons to conduct electricity and acts as an insulator.
- Doping introduces impurities into the crystal lattice. For example, adding phosphorus atoms with five valence electrons creates n-type semiconductors. The extra electron becomes a free carrier, able to move under the influence of an electric field, allowing for conduction. Boron with three valence electrons creates p-type semiconductors with “holes” acting as positive charge carriers.
- Band Theory and Conductivity Gap:
- Quantum mechanics explains the electronic properties of materials like semiconductors through the concept of energy bands. Filled bands with paired electrons cannot conduct electricity. The conduction band holds excited electrons that can flow, while the valence band holds tightly bound electrons.
- The gap between these bands, called the bandgap, determines the insulating or conducting nature of a material. Semiconductors have moderate bandgaps, allowing them to transition from insulators to conductors under specific conditions.
- Doping and Conductivity Control:
- By controlling the type and amount of dopants, we can tailor the conductivity of semiconductors. Higher doping concentration increases free carriers and conductivity. Additionally, specific doping profiles create junctions between n- and p-type regions, forming the foundation for semiconductor devices like diodes and transistors.
Semiconductor Devices and Functionality:
- Diodes: These fundamental building blocks allow current to flow in one direction due to the asymmetry of n-p junctions. They rectify alternating current or act as electronic switches.
- Transistors: These tiny “gates” control the flow of current in a circuit. By applying a small voltage to the gate, we can regulate a larger current between source and drain terminals, enabling amplification and logic operations.
- Integrated Circuits (ICs): By combining millions of transistors and other components on a single silicon chip, we create complex circuits like microprocessors, memory devices, and sensors that power modern electronics.
Importance of semiconductors
Semiconductors are often referred to as the “brains of modern electronics,” and for good reason. These tiny chips made from materials like silicon are not only ubiquitous, but they are also essential for the functioning of countless devices and systems that underpin our daily lives.
- Pervasive Presence: They are found in virtually everything electronic, from smartphones and computers to TVs and medical equipment. Cars alone can contain hundreds of semiconductor chips controlling everything from engine management to entertainment systems.
- Enabling Technology: Semiconductors are the key enabling technology behind many advancements in areas like communication, computing, healthcare, and even transportation. They allow for miniaturization, efficient power management, and increased processing power, driving innovation across various sectors.
- Economic Engine: The semiconductor industry is a global powerhouse, generating trillions of dollars in revenue and employing millions of people worldwide. It fosters research and development, creating new technologies and opportunities for economic growth.
- Strategic Importance: For countries, reliable access to semiconductors is crucial for national security, critical infrastructure, and technological independence. Reliance on foreign imports can pose significant risks, making domestic production and chip design capabilities strategically important.
- Shaping the Future: Semiconductors are at the heart of emerging technologies like Artificial Intelligence, robotics, and autonomous vehicles. Their continued development will play a key role in shaping the future of our world, influencing everything from healthcare to climate change solutions.
Goals of India’s Semiconductor Policy
Three goals of India’s semiconductor strategy are:
- The first is to reduce dependence on semiconductor imports, particularly from China
- The second is to build supply chain resilience by integrating into the semiconductor global value chain (GVC).
- The third is to double down on India’s comparative advantage: India already plays host to the design houses of every major global semiconductor industry player and Indian chip design engineers are an indispensable part of the semiconductor GVC.
These goals will help cement India’s status as a semiconductor powerhouse.
Design Linked Incentive Scheme
Ministry of Electronics and Information technology has announced the Design Linked Incentive (DLI) Scheme to offset the disabilities in the domestic industry involved in semiconductor design in order to not only move up in value-chain but also strengthen the semiconductor chip design ecosystem in the country.
CDAC is responsible for implementation of the DLI Scheme as Nodal Agency.
The Design Linked Incentive (DLI) Scheme aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s) over a period of 5 years.
Objectives
- Nurturing and facilitating the growth of the domestic companies, startups and MSMEs.
- Achieving significant indigenization in semiconductor content and IPs involved in the electronic products deployed in the country, thereby facilitating import substitution and value addition in electronics sector.
- Strengthening and facilitating access to semiconductor design infrastructure for the startups and MSMEs.
Issues with DLI
DLI scheme fares well with its focus on providing access to design infrastructure, such as electronic design automation (EDA) tools, alongside financial subsidies for different steps of the chip design process. But there has been lacklustre uptake of the scheme.
- Low Uptake: It has fallen short of its target of supporting 100 startups in five years, with only seven approvals so far.
- Stringent domestic ownership clauses restricting foreign investment and hindering capital-intensive R&D.
- Scheme mandates that beneficiary startups maintain their domestic status for at least three years after receiving incentives, and for this they cannot raise more than 50% of their requisite capital via foreign direct investment
- Modest financial incentives not compensating for limited access to long-term funding in India.
- Costs for semiconductor design startups are also significant.
- Semiconductor R&D usually only pays off in the longer term, and the funding landscape for chip startups in India continues to be challenging.
- Capital requirements, combined with the lack of success stories caused by the absence of a mature startup funding ecosystem for hardware products in India
- Centre for Development of Advanced Computing (CDAC) as the nodal agency raising conflict-of-interest concerns.
Recommendations for Revamping DLI:
Stimulating the design ecosystem is less capital intensive than the foundry and assembly stages of the semiconductor GVC. Bolstering this stage can help establish strong forward linkages to an upandcoming fabrication and assembly industry in India.
- De-link ownership from development, attracting global funding and boosting start-up stability.
- Increase financial support to match the ambitious policy shift towards wider design capabilities.
- Establish a new nodal agency like Karnataka’s Semiconductor Fabless Accelerator Lab (SFAL) for effective implementation and mentorship.
| Case Study Karnataka government’s Semiconductor Fabless Accelerator Lab (SFAL) The Semiconductor Fabless Accelerator Lab (SFAL), established by the Karnataka government in 2020, is a unique initiative aimed at propelling India’s semiconductor design ecosystem. It is often cited as a successful model for nurturing start-ups in this high-tech sector. SFAL functions as a one-stop shop for semiconductor design start-ups in India. It provides a comprehensive package of support, including: Financial assistance: Grants and subsidies for various stages of chip design and development.Technical infrastructure: Access to state-of-the-art Electronic Design Automation (EDA) tools, simulation platforms, and testing facilities.Mentorship and guidance: Expert guidance from industry veterans and academicians.Ecosystem building: Fostering connections with investors, manufacturers, and other stakeholders |
- Expand DLI’s scope to support start-ups at various stages, not just production-ready ones
Conclusion
Semiconductors are the building blocks of our modern world, driving technological innovation, powering essential systems, and shaping the future we live in. Revamping the DLI with these principles can create a nurturing environment for semiconductor design in India. By de-risking R&D, attracting global expertise, and fostering a thriving ecosystem, India can transform its current chip design landscape and inch closer to its semiconductor powerhouse aspirations.
RELATED TOPICS
C-DAC
Centre for Development of Advanced Computing (C-DAC) is the premier R&D organization of the Ministry of Electronics and Information Technology (MeitY) for carrying out R&D in IT, Electronics and associated areas. Different areas of C-DAC, had originated at different times, many of which came out as a result of identification of opportunities.
Semicon India Programme
- The Union Cabinet had approved the comprehensive Semicon India programme with a financial outlay of INR 76,000 crore for the development of a sustainable semiconductor and display ecosystem in 2021.
- Semicon India Program aims to provide attractive incentive support to companies / consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT) and Semiconductor Design.
- The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations.
References
https://www.semiconductors.org
https://ism.gov.in/about-semiconindia-programme.html
Practice Question
Critically analyze the performance of the Design-Linked Incentive (DLI) scheme under the Semicon India Program. Suggest necessary measures to revamp the scheme. [250 words]