India needs to move from being an assembler to a manufacturer of microchips. In this context, identify the associated challenges and opportunities.

The Microchips refer to small sized semiconductor chips which are increasingly being used in day-to-day gadgets, appliances, devices, control systems, etc.

Rise of 5G, artificial Intelligence and internet of things has given significant push to microchip industry.

In this context, associated challenges for India are:

  • Historical – lack of any previous chip manufacturing base.
  • Geographical – inadequate mining & processing of silicon & rare earth metals used in industry.
  • Research – lack of adequate research and development in chip manufacturing.
  • Administrative – complex regulatory regime and outdated laws Like IT act 2000.
  • Imports – heavy reliance on imports for chips and associated hardware.
  • Strategic – semiconductor chips are strategic sector and countries like USA, Taiwan are not willing to share Technology.

Opportunities in sector:

  • Large consumer base in India and huge market for the sector.
  • Large base of IT companies in India.
  • Large push by government in form of Digital communication policy 2018 and National Electronic Manufacturing Policy 2019.

India needs to work on priority basis to manufacture microchips in India, as all the technology of today rely upon microchips and Covid19 pandemic has highlighted the vulnerabilities in global supply chain.

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