The semiconductor industry in India
What are semiconductors? How are they used?
A semiconductor is a microchip or an integrated circuit. It consists of materials that can perform two roles together. A semiconductor possesses the properties of an insulator and a conductor. Semiconductors can conduct electricity in a controlled fashion. Hence, they are indispensable to electronics.
Semiconductors use raw materials like gallium arsenide, germanium, silicon, and metals.
Most electronic devices depend on this crucial element. Thus, semiconductors are vital for the survival of modern life. Electronic devices include computers, mobiles, medical equipment, cars, and watches. Semiconductors make these electronic devices cheaper, faster, and highly efficient.
Computers use semiconductors like memory units, microprocessors, and graphic processing units. They are used in household appliances like air conditioners, washing machines, and refrigerators. Additionally, the ATMs used for cash withdrawal use hi-tech semiconductors for seamless functioning.
Semiconductors have extensive use in your day-to-day lives. You can see their use from healthcare equipment to WiFi systems. Thus, semiconductors strengthen the foundation of a modern, global world. With a shortage in the industry, there can be major hindrances in the development of the modern world.
Leading players in the semiconductor and display industry in India
The semiconductor industry has two types of companies. The first is a fable firm that focuses on the design aspect of semiconductors. The other is foundries that focus on the manufacturing of semiconductors.
Here’s a look at some of India’s leading semiconductor companies also listed on the stock exchange.
The company engages in designing semiconductors. The focus is on mixed-signal IPs, turnkeys, and the Internet of Things. Its semiconductor solutions are available to clients across the globe.
ASM Technologies provides its clients with R&D, product development, and engineering services. Its client portfolio includes companies engaged in manufacturing electronic devices using semiconductors. So, ASM gets impacted by the fluctuations in the semiconductor industry.
The company’s products include electronic integrated circuits. These are used in devices like computers and mobile phones. SPEL runs and manages Natronix, India’s only semiconductor assembly and test facility.
Dixon is the largest LED TV screen manufacturer in India. It works with brands like Panasonic, Havells, Philips, OnePlus, Xiaomi, and Samsung. The company has also started operations in ICT, mobile, and laptop hardware. These products depend heavily on semiconductors.
In 2022, the group announced an investment in India’s semiconductor and display industry. With an investment of Rs. 94,500 crores, Vedanta Displays Ltd. plans to set up a display fabrication unit. Similarly, with an investment of Rs. 60,000 crores, Vedanta Semiconductors Ltd. plans to set up an integrated semiconductor fabrication unit.
Tata Elxsi provides semiconductor services. These services focus on SDK and reference design solutions, AI tools and frameworks, multimedia reference frameworks, functional safety compliance, and more.
Effects of chip shortage
During the global lockdown of early 2020, semiconductor demand dropped suddenly. Some East Asian semiconductor factories shut operations because of abysmal demand. Most of this was caused because automobile companies cancelled their chips orders as the demand for their cars slowed down.
When the economy reopened, the demand for electronic items increased sharply. That included computers, laptops, and smartphones. It was because people needed the equipment to work from home. There was a disruption in the semiconductor supply chain with this increasing demand and the recovery of the automobile industry. The suppliers did not have the means to manufacture chips. Thus, chip-sensitive companies needed to wait for semiconductors to fulfil their orders.
The production of chips cannot increase overnight. Many industries dependent on using chips are still facing shortages.
The semiconductor and display industry in India has high growth potential. Industries relying on semiconductors as inputs are experiencing high demand. As a result, booming growth in the semiconductor industry is expected. The end-user industries like telecommunication equipment, office automation, automobiles, industrial machinery, mobile devices, and more have applications for computing in some form. Therefore, they need semiconductors.
India’s semiconductor industry is entirely dependent on imports. USA, China, Japan, Taiwan, and some European nations export semiconductors to global markets. Fortunately, India has an advantage in the aspect of designing chips.
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