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Analysis of Sansad TV Discussion: ”Role of Semiconductors in the Future of Industry 4.0”


The Union Cabinet recently approved a comprehensive program for the development of a sustainable semiconductor and display ecosystem in the country.

  • With an outlay of Rs.76,000 crore (10 billion US dollars), the scheme has incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.
  • In total, the Government of India has committed support of Rs. 2,30,000 crore (USD 30 billion) to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block.

What are the broad incentives that have been approved?

The programme aims to provide attractive incentive support to companies/consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT), Semiconductor Design.

Why this Program is crucial for India’s economic future?

  • Coming at a time when the entire world is facing a shortage of semiconductors, analysts say the move could go a long way in establishing the country as a global hub for electronics goods, besides creating jobs and attracting investments from top firms around the world.
  • This is the era where Artificial Intelligence, Big Data, and Cloud Computing act, analyze and alert for the next steps of decision making.
  • In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure.
  • The approved program will propel innovation and build domestic capacities to ensure the digital sovereignty of India.
  • It will also create highly skilled employment opportunities to harness the demographic dividend of the country.
  • Development of semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration to the global value chain.
  • The program will promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by 2025.

How this program will prove a game-changer for Industry 4.0?

  • Semiconductors and displays are the foundation of modern electronics driving the next phase of digital transformation under Industry 4.0.
  • Semiconductors and display manufacturing is a very complex and technology-intensive sector involving huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology, which require significant and sustained investments.
  • The program will give an impetus to semiconductor and display manufacturing by facilitating capital support and technological collaborations.

What is the proposed India Semiconductor Mission?

  • In order to drive the long-term strategies for developing sustainable semiconductors and display ecosystem, a specialized and independent “India Semiconductor Mission (ISM)” will be set up.
  • The India Semiconductor Mission will be led by global experts in the semiconductor and display industry.
  • It will act as the nodal agency for efficient and smooth implementation of the schemes on Semiconductors and Display ecosystem.

What is Industry 4.0 Technology?

  • The term Industry 4.0 refers to the leveraging of cyber-physical domains in association with the latest technologies like AI, IoT, Cloud computing, AR, 3D printing etc. to enhance productivity.
  • Industry 4.0 is already influencing sectors like manufacturing, supply chain management, construction, shipping etc. and shall impact all the aspects of our day-to-day activities. It is truly considered to be a disruptive technology.
  • In the Industry 4.0 scheme, various cyber-physical systems operate together and make corrective decisions on their own so as to enhance productivity.
  • A timely alert for human intervention is generated informing the predicted cause and likely maintenance required so as to ensure uninterrupted machine availability.
  • The logic of distributed processing for regular tasks with centralized decision making using an analytics framework is extensively utilized here.
  • The smart sensor information emanating from the cyber-physical systems is processed on the cloud servers.
  • In the cloud servers, the AI analytics comprising mathematical models run predictive algorithms to improve productivity and assist in guiding the process of manufacturing.
  • The implementation of Industry 4.0 requires not only a horizontal factory-to-factory integration but a vertical Integration to connect the hierarchies of a production line.
  • Overall, the intelligence of the smart factory is achieved with the convergence of technologies of information processing as part of a digital ecosystem.
  • Industry 4.0 will usher in a new age of connected technologies and data-driven insights, and change the way people work and interact with each other.
  • Innovative technologies, such as artificial intelligence (AI), mass automation, industrial communications, Big Data, robotics, and 3D printing are transforming the global manufacturing landscape.

Indian Perspective on Industry 4.0 Technology

  • In 2018, the World Economic Forum set up its Centre for the Fourth Industrial Revolution in India to work in collaboration with the GoI.
  • The National Institute for Transforming India (NITI) Aayog is the designated nodal agency to interact with the World Economic Forum for elaborating the new policy frameworks for emerging technologies.
  • The GoI has already made the enabling policy framework and set up incentives for infrastructure development on a PPP (Public-Private Partnership) model.
  • Samarth Udyog Bharat 4.0 (Smart Advanced Manufacturing and Rapid Transformation Hubs) under the Department of Heavy Industries (Ministry of Heavy Industries & Public Enterprises) is India’s initiative to push for Industry 4.0 implementation with an aim to propagate technological solutions to Indian manufacturing units by 2025 through steps like awareness programme, training, demo centres etc.
  • The industry, academia and international cooperation in the field of technologies related to Industry 4.0 is the policy formulated by the government.
  • India’s National Manufacturing Policy (NMP) has been promulgated which aims at enhancing the share of manufacturing in GDP to 25% and Industry 4.0 is the only way ahead to achieve this task.
  • So, India is at the cusp of a digital edge where young talent plays leading roles through their start-ups, and organizations are adopting technologies for a paradigm shift.


Cabinet decision on semi-conductors will encourage research and innovation in the sector. It will also boost manufacturing and thus strengthen the dream of an Aatmanirbhar Bharat. The program will usher in a new era in electronics manufacturing by providing a globally competitive incentive package to companies in semiconductors and display manufacturing as well as design. This shall pave the way for India’s technological leadership in these areas of strategic importance and economic self-reliance.

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