Context:

The U.S. Senate overwhelmingly approved a bill that aims to boost U.S. semiconductor production and the development of artificial intelligence and other technology in the face of growing international competition, most notably from China.

Relevance:

GS-II: International Relations (Foreign Policies of Interest to India), GS-III: Industry and Infrastructure

Dimensions of the Article:

  1. About the U.S. Bill on boosting semiconductor production
  2. About India’s PLI scheme for Large Scale Electronics Manufacturing

About the U.S. Bill on boosting semiconductor production

  • The Passing of this bill at the Senate demonstrates how confronting China economically is an issue that unites both parties in Congress.
  • The centerpiece of the bill is a $50 billion emergency allotment to the Commerce Department to stand up semiconductor development and manufacturing through research and incentive programs previously authorised by Congress.
  • It comes as the nation’s share of semiconductor manufacturing globally has steadily eroded from 37% in 1990 to about 12% in 2021, and as a chip shortage has exposed vulnerabilities in the U.S. supply chain.
  • One of the bill’s provisions would create a new directorate focused on artificial intelligence and quantum science with the National Science Foundation.

Click Here to read more about the Semiconductor Chip shortage issue

About India’s PLI scheme for Large Scale Electronics Manufacturing

  • In 2020, the government of India notified three schemes involving total incentives of around Rs 48,000 crore for electronics manufacturing,
  • The Production Linked Incentive Scheme (PLI) for large scale electronics manufacturing.
  • The scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).
  • The modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.
  • PLI for Large Scale Electronics Manufacturing scheme proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including electronic components and semiconductor packaging. Under the scheme, electronic manufacturing companies will get an incentive of 4 to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies over a period of next 5 years.
  • The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors proposes a financial incentive of 25% of capital expenditure has been approved by the Union Cabinet for the manufacturing of goods that constitute the supply chain of an electronic product. The SPECS notified for manufacturing of electronics components and semiconductors has a budget outlay of Rs 3,285 crore spread over a period of eight years.
  • Modified Electronics Manufacturing Clusters Scheme 2.0 has a total incentive outlay of Rs 3,762.25 crore spread over a period of 8 years with an objective to create 10 lakh direct and indirect jobs under the scheme. The EMC 2.0 scheme will provide financial assistance up to 50% of the project cost subject to a ceiling of Rs 70 crore per 100 acres of land for setting up of Electronics Manufacturing Cluster projects.

-Source: The Hindu

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