Semiconductors

Story hook

In August 2020, a Toyota plant in Gujarat had to halt production because a Tier-2 supplier in Taiwan couldn't deliver microcontroller chips. By the end of 2021, the global automotive industry had lost ₹16 lakh crore in revenue to the semiconductor shortage that froze every assembly line from Munich to Maruti. New cars arrived without infotainment systems, washing machines without programmable cycles, gaming consoles disappeared from stores. A single point of failure — chip fabrication concentrated in Taiwan (TSMC) and South Korea (Samsung) — had brought global manufacturing to its knees.

Three years later, on 13 March 2024, Prime Minister Modi laid foundation stones for three semiconductor units in Gujarat and Assam under the India Semiconductor Mission (ISM) — a ₹76,000 crore programme to put India on the chip-fab map. Tata Electronics, in partnership with PSMC of Taiwan, broke ground on a 27,000-crore wafer fab in Dholera (Gujarat). Micron Technology of the US had already started building a ₹22,500-crore OSAT facility in Sanand (Gujarat) in 2023. Tata's ₹27,000-crore OSAT in Jagiroad, Assam — the country's first chip facility in the North-East — also broke ground.

For the first time in independent India's history, the country was building actual silicon foundries — not just designing chips for foreign factories. By 2026-27, India will be producing its first Made in India chips. By 2030, the government targets a $110 billion semiconductor ecosystem. The bet is bigger than space, bigger than 5G — and it determines whether India is a sovereign industrial power or a permanent customer.

Why this matters for UPSC

Semiconductors is the fastest-rising Mains + Interview topic since 2022. UPSC asked detailed Mains questions in 2022 and 2023 on the global supply chain and India's response. Prelims has begun asking on the India Semiconductor Mission, the SPECS scheme, and PLI for Semiconductors. Cross-cuts with IR (US-China chip war), Economy (industrial policy), Internal Security (chip supply chain as national security).