Examine the factors on which location of semiconductor and electronic chip making industry depend. Enumerate the steps taken by India to boost electronic manufacturing in country.

The semiconductor and electronics chip industry is key for consumer electronics, Computers and even automobiles. It is largely concentrated in East Asian nations like Japan, South Korea and Taiwan.

Factors affecting location of this industry:

  • Labour – Skilled labour is needed to perform necessary operations. The cost of labour should not be very high.
  • Technology – It is required to convert silicon wafers to chip form in a cost-effective manner.
  • Government support – It incentivises companies to invest in research and development.
  • Export facility – Good transport connectivity is needed since these industries are part of global value chains.

The steps India has taken to support this ecosystem are:

  • Setting bold targets like net zero imports by 2030.
  • Production linked incentive scheme – Electronics companies receive subsidies based on their incremental production over previous year.
  • National policy on electronics, 2019 – It targets cluster-based development of this industry.
  • 100 percent FDI has been permitted.
  • Increasing ease of doing business and expediting approval of new electronics parks.
  • Skill India mission is being utilised to create a large pool of skilled labour that this industry needs.
  • Sovereign patents fund – Government will buy patents from electronics companies, and license MSMEs to enable cost effective production of patented electronics.
  • Revised scheme for exports namely RoDTEP to help this sector.

Electronics industry is a contributor to consumer goods, defence, medical and automobile sectors. It can help reap demographic dividend and the government efforts are appreciable.

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