STILL FABLESS

WITH GLOBAL SILICON POWERHOUSES MOVING TO BOOST CHIP MANUFACTURING IN THEIR HOME COUNTRIES, INDIA'S SEMICONDUCTOR DREAMS ARE UP AGAINST STIFF COMPETITION

- NIDHI SINGAL

WHAT'S THE MOST critical piece of electronics in the modern world? No prizes for guessing it's the chip, a tiny slice of silicon that has billions of integrated circuits wired into it. Programmed with software, the chip (or SoC, system-on-a-chip) powers practically every electronic device that you own the car (yes, it qualifies as an electronic device now), your laptop, smartphone, washing machine, refrigerator, etc.-and don't own, too, such as modern manufacturing plants and warehouses that leverage Industry 4.0 tools, trucks with GPS trackers, and also the electronics used in defence equipment and weaponry. In fact, the modern automobile has anywhere between 2,000 and 3,000 chips, depending on who you're talking to and how much you're spending to buy it-the more expensive the car, the more features it has and, ergo, the more chips it needs.

So, what happens when there's a squeeze on the production of chips? Mayhem. That's what happened during the Covid-19 pandemic, when chip production fell. Automobiles were the most visible casualty, with manufacturing plants unable to churn out cars, dealers' inventories running empty, and full factories shutting down around the world. Many other industries were also affected, globally and in India.

And so, what do you as a country, as a government, do? Well, you either wait in queue, hoping that the supply lines are able to meet your demand soon. Or you take the plunge and jolly well build the darn thing in your own country. It takes a brave government to go over that ledge because building an ecosystem that manufactures chips is a treacherous, painfully long, and no-guarantee-of-the-harness-holding-up kind of bungee jump in the dark.

And so it was that in December 2021, India announced an incentive plan of around $10 billion (`76,000 crore) to attract firms that would help the country build an ecosystem for chip manufacturing.