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M-Chips in Defence Equipment

M-Chips in Defence Equipment: Relevance for UPSC


M-Chips in Defence Equipment: Why in news?


  • The MoD has tied up with the Ministry of Electronics and Information Technology (MeitY) to manufacture “chips” and develop an “Indian micro-processor chip”.
  • Initially, the MoD has asked for 5 lakh chips.
  • The chips will be ready by the end of 2023 or early 2024, estimates say.


M-Chips in Defence Equipment: What are M-Chips?


  • Semi-conductors — also known as ‘chips’ in engineering terminology — are used in fighter jets, copters, tanks, naval warships, submarines, missiles, night-vision devices, radars, displays for pilots, space applications and communication networks.
  • The basic component of a semiconductor chip is a sliver of silicon, which is etched with billions of microscopic transistors and projected to specific minerals and gases, forming patterns to control the flow of current while following different computational instructions.
  • The most-advanced semiconductor technology nodes available today are the 3 nanometre (nm) and the 5nm ones.
  • Semiconductors having higher nanometre value are applied in automobiles, consumer electronics and so on, while those with lower values are used in devices such as smartphones and laptops.


M-Chips in Defence Equipment: Why India is striving for Indigenous Chip Making?


  • The primary goal is to have two versions of indigenously designed and developed ‘secure chips’.
  • About 50,000 such chips are expected to be deployed in systems and equipment for the armed forces.
  • At present, the forces are partially dependent on in-house labs of the Defence Research and Development Organisation (DRDO) for semiconductors. Semiconductor Laboratory, Mohali, is the manufacturing unit.
  • A majority of the chips are imported.


M-Chips in Defence Equipment: Role of tiny microchips in the battlefield


  • In the current geopolitical contestation for critical and emerging technologies, the contribution of semiconductor technology to the defence sector cannot be overlooked.
  • While advanced military systems seem to utilise high-end electronics, the integral part of these systems remains fundamental semiconductor components.
  • Some components have evolved from primitive single-piece devices to complex tools. There are some semiconductor components that have the ability to remain indispensable to modern-day military systems.
  • Some Examples:
    • Sensors and Actuators
    • Memory Chips
    • Electro-optical system
    • Microcontrollers
    • Logic Devices
    • Discreet Devices


M-Chips in Defence Equipment: What is behind the global chip shortage?


  • Chip, or semiconductor, which is the brain-centre of any electronic technology, have found itself a rarity in the post-Covid era, with many large factories shutting down in places like South Korea and Taiwan. This has created a buzz in demand that these foundries were unable to satisfy once they opened.
  • On the one hand, the pandemic caused an increase in the demand for electronic devices like computers, laptops and smartphones etc.
  • Manufacturing and logistical constraints meant that the situation was only exacerbated.
  • This shortage that started last year is expected to continue till 2022, and to prevent such a situation in future, many companies are planning to reduce their reliance on only a few big factories which supply to the whole world.


M-Chips in Defence Equipment: An Opportunity for India


  • The global semiconductor market is projected to grow from $340 billion in 2015 to $650 billion in 2025, with a CAGR of 6.7%.
  • Taiwan is the world’s largest manufacturer of semiconductors, with a market share of over 50 percent.
  • Today, India’s semiconductor demand stands at around $24 billion and is expected to reach $100 billion by 2025. Presently the country’s semiconductor demand is entirely met through imports.
  • With the growing technology and the advent of IoT and 5G technology in India, the demand for semiconductor chips is increasing.
  • India is set to witness a significant demand spike by 2025 driven by electronic manufacturing, IoT products and data centre facilities.
  • Semiconductor shortages in the pandemic and the new geopolitical realities of semiconductor supply chains further exacerbate the need to develop reliable and trusted sources for semiconductors.


M-Chips in Defence Equipment: Government Initiatives


– In the Union Budget 2017-18, the Government of India increased the allocation for incentive schemes such as the Modified Special Incentive Package Scheme (M-SIPS) and the Electronic Development Fund (EDF) to Rs 745 crore (US$ 111 million) for providing a boost to the semiconductor as well as electronics manufacturing industry.

– The Union Cabinet approved an incentive of up to Rs 10,000 crore for investors by amending the Modified Special Incentive Package Scheme (M-SIPS), to further encourage investment in the electronics sector, generate employment and reduce dependence on imports.

– The Ministry of Electronics and Information Technology is planning to revise its policy framework, wherein the government will play a more active role in developing the sector by attracting more private players and providing initial capital to make India a global semiconductor hub.


M-Chips in Defence Equipment: The way ahead


  • Chip-making also requires gallons of ultrapure water in a single day, which experts say, could be a task for the government to provide to factories, compounded also by the drought conditions which often prevail in large parts of the country.
  • Besides, an uninterrupted supply of power is central to the process, with just seconds of fluctuations or spikes causing millions in losses.
  • Another task for the government is to drive up consumer demand in the semiconductor industry to not end up in a situation where these ventures remain successful only till taxpayers are forced to fund required subsidies.


M-Chips in Defence Equipment: Conclusion


With the government curating policies to encourage defence manufacturing and start semiconductor manufacturing in the country, this is the time for a confluence of both in India’s national interest.

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