Semiconductor Manufacturing Push
India aims to reduce import dependency with the rollout of its first domestically manufactured semiconductor chip in 2025.
Five semiconductor facilities are under construction, including Tata’s assembly and testing unit in Morigaon and a fabrication plant in Dholera.
Financial Challenges and Budget Gaps
The Semicon India Programme, Launched in 2021, has faced underutilization of funds, with spending much lower than the budgeted amounts in recent years.
In FY23, only ₹13 crore was spent out of ₹200 crore, and in FY24, the revised expenditure was ₹681.11 crore compared to ₹1,503.36 crore.
Despite this, the government has increased the budget for FY25, signaling a focus on improving implementation.
Rising Import Dependency
India’s reliance on semiconductor imports has surged, especially in areas like monolithic ICs, memory chips, and amplifiers.
Monolithic ICs made up 2.09% of India’s total imports in FY25, compared to just 0.19% in FY16, reflecting the increasing dependency on semiconductor chips.
The share of semiconductor chips in total imports has grown significantly, with China being the primary supplier.
Opportunities and Gaps in the Value Chain
New manufacturing facilities will help India gain a foothold in the global semiconductor value chain through assembly, testing, and fabrication.
However, India still faces challenges in areas like chip design software (EDA), core intellectual property (IP), semiconductor materials (wafers), and advanced manufacturing tools.
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