Context

• Recently, the Union Cabinet has approved the proposal of Tata Electronics to set up a semiconductor manufacturing plant in Dholera in partnership with PSMC.
• This will generate more than 20,000 jobs.

 Key Points

• This will be India's first commercial semiconductor plant.
• Along with this, it will also be a medium for Tata Electronics to enter the global semiconductor industry.
• The cost of the above mentioned semiconductor manufacturing plant is Rs 91,000 crore.
• Tata Electronics has collaborated with Powerchip Semiconductor Manufacturing Corporation (PSMC) to set up India's first artificial intelligence (AI)-enabled state-of-the-art plant.
• Its manufacturing capacity will be up to 50,000 wafers per month.
• Chips for applications such as power management ICs, display drivers, microcontrollers (MCUs) and high-performance computing logic will be made here, addressing the growing demand in markets such as automotive, computing and data storage, wireless communications and AI.

 Background

• The government had launched the Rs 76,000 crore chip incentive scheme in December 2021, under which the Center offered half the capital expenditure cost of a plant as subsidy.
•  All the proposals that were approved recently will receive 50% of their capital expenditure cost from the Centre.
• Then there are schemes like the Production Linked Incentive (PLI) scheme for smartphone and laptop manufacturing, where again, the government is offering subsidies to companies based on their sales bills.

India's semiconductor policy

• India's chip incentive schemes focus on promoting all three aspects of the semiconductor ecosystem – packaging units called ATMP facilities; assembly and test projects called OSAT plants; and full-scale foundries that can manufacture chips.

Important Facts For Exam

About Semiconductor Chips

• Semiconductor is a material whose conductivity lies between a good conductor and a bad conductor.
• They may be compounds of the pure element silicon or germanium or gallium, arsenide or cadmium selenide.
• Semiconductors act as the heart and brain of all modern electronics and information and communication technology products.
• These chips are now an integral part of contemporary automobiles, home gadgets and essential medical devices such as ECG machines.
• It is noteworthy that these are essential for almost all sectors of the economy including aerospace, automobile, communications, clean energy, information technology and medical devices etc.
• Semiconductors are highly complex products to design and manufacture, providing the functionality electronic devices need to process, store, and transmit data.