India aims to become a semiconductor manufacturing hub. What are the challenges faced by the semiconductor industry in India? Mention the salient features of the India Semiconductor Mission.

Introduction

Semiconductors are the foundational 'oil' of the digital economy—vital for electronics, defence, telecom, EVs and AI. Import-dependence and pandemic-era chip shortages have driven India's ambition to become a global semiconductor manufacturing hub.

Challenges Faced by the Industry in India

• Capital intensity: a leading-edge fabrication plant (fab) costs billions of dollars with long gestation and thin margins for error.
• Resource needs: fabs demand ultra-pure water, uninterrupted power and specialized chemicals and gases.
• Ecosystem gap: weak upstream supply chain—equipment, materials, design IP and few existing fabs.
• Talent: shortage of specialized fabrication and process engineers despite strong chip-design strength.
• Geopolitics and competition from entrenched hubs (Taiwan, South Korea, US) and export controls.

Salient Features of the India Semiconductor Mission (ISM)

• Launched in 2021 with a corpus of about ₹76,000 crore to build a full semiconductor and display ecosystem.
• Fiscal support of up to 50% of project cost for setting up fabs, display fabs and compound-semiconductor/ATMP-OSAT (assembly, testing, packaging) units.
• Design Linked Incentive (DLI) scheme to nurture domestic chip-design startups.
• Skilling initiatives and the annual SEMICON India platform to attract investment.

Emerging Projects and Conclusion

Micron's assembly-test plant at Sanand, Tata's fab at Dholera and ATMP unit in Assam, and CG Power-Renesas mark early traction. Sustained ecosystem-building, talent and R&D will determine whether India moves from assembly toward advanced fabrication.