Geography

A semi-conductor is a substance characterized by its capacity to carry a small electrical current. The essential criterion for a semi-conductor is that it should neither be an excellent conductor of electricity nor a poor conductor; instead, it falls in between these extremes.

Semiconductors function by virtue of an electron imbalance. This imbalance of electrons generates positive charges (WHERE THERE ARE EXCESS PROTONS) and negative charges (WHERE THERE ARE EXCESS ELECTRONS) at two ends of surfaces of the semi-conductor material. 

Due to this helpful characteristic, it is used in the following industries

Research and Development Centers

• Proximity to leading research and development institutions and universities focusing on technology and engineering is crucial.

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Skilled Workforce

• The availability of a highly skilled workforce specializing in electrical engineering, materials science, and related fields is essential.

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Infrastructure and Connectivity

• Robust infrastructure, including reliable power supply, advanced production facilities, etc., is a vital factor in determining the location of the Semiconductor industry.

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Access to Capital

• The availability of large capital is essential as a semiconductor requires significant investments in research, development, and production facilities.

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Government Support and Incentives

• Supportive government policies, tax incentives, and grants can attract semiconductor companies to a specific location. 

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Intellectual Property Protection

• Strong legal frameworks and intellectual property protection contribute to a conducive business environment for semiconductor companies. 

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Cluster Effect

• An established semiconductor industry cluster can attract more companies to a specific location. Clusters promote collaboration, knowledge exchange, and the development of specialized supply chains.

Taiwan

• Taiwan, specifically Hsinchu Science Park, is the largest semi-conductor producer, producing almost 60% of the global semi-conductors. Taiwan Semi-conductor Manufacturing Corporation (TSMC) is the largest producer of semi-conductors in the world. 
• The island nation benefits from a robust industrial ecosystem, government support, and proximity to major Asian markets.
• Additionally, the Taiwanese government has actively supported the semiconductor industry through policies and investments.

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The USA 

• The USA is the second most significant producer. 
• The US is home to Silicon Valley in California, a global technology and semi-conductor innovation hub. 
• It benefits from a well-developed infrastructure, large market, skilled workforce, and proximity to research institutions.

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South Korea

• With companies like Samsung, South Korea is a significant player in semiconductor production. 

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China 

• China has been aggressively investing in its semiconductor industry. 
• Government policies, access to a large consumer market, and technological advancements contribute to China’s presence in the industry.

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Japan

• With companies like Toshiba and Renesas, Japan has a long history in semiconductor manufacturing.
• A robust industrial base and a focus on high-tech manufacturing contribute to Japan’s position in the semiconductor industry.

Historically, India has heavily depended on semi-conductor imports from Taiwan and Hong Kong to meet its growing demand for electronic goods.

The Indian Government has recognized the strategic importance of the semi-conductor industry and has taken steps to encourage its growth.

Why Should India Invest in the Semi-Conductor Industry?

1. Save Forex and Earn Revenue: Investing in semi-conductor manufacturing in India will diminish reliance on imported semi-conductors for domestic companies and generate revenue through exports to global markets. This strategic move could position India as a key global hub for electronic goods, fostering job creation and attracting investments from top multinational firms.
2. Meeting Escalating Demand: The surge in digitization, coupled with advancements in intelligent computing and the rise of artificial intelligence (AI), has led to an unprecedented demand for semi-conductors and chipsets.  
3. Self-Sufficiency (Atma Nirbhar): Establishing a semi-conductor industry in India would contribute to the nation’s self-sufficiency, addressing the challenges of supply chain disruptions witnessed during the COVID-19 pandemic.  
4. Multiplier Effect: Developing indigenous semi-conductor manufacturing capabilities will create a positive ripple effect on related industries.

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Initiatives to promote Semi-Conductor Manufacturing in India

• Production Linked Incentive (PLI) Scheme for IT Hardware and Semi-Conductors: The Government is giving incentives on goods manufactured in India. 
• Semicon India Program: The Government is providing financial support to companies who are investing in the development of the semi-conductor ecosystem, such as fabrication (fab), research, design and testing facilities. For example,
  • Semiconductor Fab: Dholera
  • Assembly Testing, Marking and Packaging Facility: Morigaon (Assam), Sanad (Gujarat)
• Design Linked-Incentive Scheme: The Government provides financial support of 50%  of eligible expenditure on the design, subject to a ceiling of ₹15 crores per applicant.
• Semiconductor Manufacturing Incentive Policy: Indian government to provide subsidies worth $15 billion to promote manufacturing of Semiconductors in India.
• India Semiconductor Mission: It is a business division within Digital India Corporation to develop vibrant display and semiconductor ecosystem.
• National Policy on Electronics, 2019: The policy aims to make India a global hub for designing and manufacturing Electronics Systems, including Chipsets.
• Foreign Direct Investment: 100% FDI in the semi-conductor industry is allowed via Automatic Route.
• Collaborations and Partnerships: The government is signing MoUs with various countries to invest in the Indian semi-conductor industry. For example, Israel has signed a MoU to invest 22,000 cr. 

Due to the above initiatives, various projects are coming up in India. One worth mentioning is Tata’s commercial fabrication plant, which is in partnership with the Taiwanese firm PSMC and costs above Rs. 91,000 crore.

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Challenges faced in manufacturing Semi Conductors

• Complex Value
  Chain: The
  semi-conductor value chain has three major components: Design,
  Fabrication, and Assembly and Testing. These processes are very expensive
  as they are highly dependent on R&D and Intellectual Property
  protection.     
• Massive
  Investment: Semi-conductor
  manufacturing is a complex, capital and technology intensive process.
  Semi-conductor Fabrication facility requires many expensive devices.
  Estimates put the cost of building a new fabrication facility (fab) over
  one billion dollars. 
• Lack of
  Skilled Workforce:
  Insufficient skilled labour poses a challenge for semi-conductor
  companies; India falls short of meeting this crucial requirement.
• Requirement
  of very specific Raw Materials: Apart from Silicon, numerous types of chemicals
  & gases are involved in semi-conductor fabrication that are not till
  now available in India.  
• Lack of
  uninterrupted Power and Water Supply: Manufacturing a single semi-conductor chip requires
  thousands of gallons of pure water and an uninterrupted power supply.
• Global
  Competition: It
  is also difficult to compete with Taiwan and China, which, due to better
  cost-efficiency and first mover advantage, have become the favoured
  destinations for global chip manufacturers. 

Proximity to Markets

• Detroit in the USA has a huge automobile industry due to its proximity to the U.S. consumer market.

Supply Chain

• Building a vehicle requires numerous components ( like steel, rubber, plastic, paint, cables etc.). Hence, an efficient supply chain is important in deciding where to locate the automobile industry. E.g., Germany’s automotive industry benefits from a well-developed infrastructure and efficient supply chain networks for building automobiles. 

Skilled Labour and Talent Pool

• Stuttgart (Germany) is home to major automotive companies benefitting from a talented pool of engineers and workers.
• Similarly, the Gurgaon-Manesar Belt (Haryana, India) has attracted automotive manufacturing due to the availability of skilled labour.

Government Policies and Incentives

• The Mexican government’s pro-business policies and trade agreements have attracted automakers to set up plants in Mexico.

Research and Development Centers

• Silicon Valley in the USA and Bengaluru in India have attracted electric and autonomous vehicles due to R&D centres in these regions. 

• Transport: Located on the banks of the Detroit River and linked to Lake Huron, the geographical positioning of the city of Detroit provides a vital connection to the expansive Great Lakes waterway system, facilitating the cost-effective movement of goods and materials.
• Labour: In the 19th century, Detroit saw the emergence of floor mills utilizing running water and the adoption of internal combustion engines for boats. It led to the establishment of numerous repair shops, fostering the development of generations of skilled labour.
• Entrepreneurs: Two iconic figures stand out in the narrative of Detroit’s entrepreneurial spirit: William Durant (founder of GM) and Henry Ford (founder of Ford Motors).
• Raw Material: Detroit’s proximity to Pittsburgh, a major steel-producing centre, ensured a steady steel supply. Additionally, the region has numerous intermediate industries providing components, such as seat cushions, spray paint, tires, and electronic circuits.

• Andaman & Nicobar Island group is situated in the Bay of Bengal. 
• It runs like a narrow chain in the north-south direction extending between 6.39°N to 14.34°N.
• The main islands under the Andaman and Nicobar Island group are
  1. North Andaman
  2. Middle Andaman
  3. South Andaman
  4. Little Andaman
  5. Car Nicobar
  6. Little Nicobar
  7. Great Nicobar

India’s southernmost point, Indira Point or Pygmalion Point, is situated here on the Great Nicobar Island.

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Nature of Islands

• The Andaman and Nicobar Islands were formed as a result of tectonic interactions between the Eurasian and Indo-Australian Plate. The Indo-Australian Plate started subducting beneath the Eurasian Plate in the Andaman Sea. As a result, volcanic activity occurs, leading to the formation of volcanic island arcs.
• Structurally, we can say that
  1. Andaman: Extension of the Arakan Yoma mountain range of Myanmar, i.e. submerged mountains  
  2. Nicobar: Extension of Mentawai islands to the southeast of Sumatra 
• The region continues to be seismically active, with occasional earthquakes and volcanic activity, reflecting the ongoing tectonic processes in the area.
• Some islands are fringed with coral reefs as well. 

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Some Important Channels

10 Degrees Channel	Separates Andaman from the Nicobar group of Islands
Coco Channel	Separates Coco Islands (of Myanmar) from Andaman Islands (India)
Grand Channel	Separates Great Nicobar from Sumatra (Indonesia)

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Volcanoes in this region

There are two important volcanoes situated in this region

Barren Island	It is an active volcano situated east of the Andaman Islands
Narcondam Island	It is a dormant volcano situated east of the Andaman Islands

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Change in names

The government has changed the names of some of the islands of the Andaman and Nicobar groups of Islands to reflect Indian history. These are

Ross Island	Netaji Subhas Chandra Bose Dweep
Neil Island	Shaheed Dweep
Havelock Island	Swaraj Dweep
Mount Harriet	Mount Manipur (As several Manipuri soldiers, including Maharaja  Kulachandra Dhwaja Singh of Manipur, were deported here after the Anglo-Manipur War of 1891)

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Polity

• Andaman and Nicobar are Union Territories of the Indian Union administered by the President through the Governor.
• Its High Court is situated in Kolkata.
• Capital Port Blair is situated on the South Andaman Island.

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Tribes of Andaman and Nicobar

4 major tribes of Andaman are as follows (all are Negrito Tribes)

Sentinelese	– It is found on North Sentinel Island (part of the North Andaman region). Only 50 to 100 members of this tribe are alive today. – Sentinelese are pre-Neolithic people who have lived here for more than 55,000 years without contact with the outside world. They still avoid any outside contact and came in the news in 2018 when an American Christian Missionary named Chau was trying to enter their territory.
Great Andamanese	– It is found on Strait Island, part of North and Middle Andaman Island.  – Fewer than 50 Great Andamanese are alive today.
Jarawa	– Jarawas are found on South & Middle Andaman islands.  – There are 300 to 400 Jarawas alive today.
Onge	– Onge are found on Little Andaman.  – Fewer than 100 Onges are alive today.

2 major tribes of Nicobar are ( (all are Mongoloid Tribes)

Shompen	Shompen resides on the Nicobar Islands.
Nicobarese	Nicobarese resides on the Nicobar Islands.

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Importance of Andaman & Nicobar

Strategic  Importance

• Securing Sea Lines of Communication (SLOC): These islands are important in
  securing busy Sea Lines of Communications (SLOC) by creating a series of
  chokepoints.
• Overseas
  Strait of Malacca: Andaman and Nicobar Islands can choke Chinese supplies in
  case of war.
• Net Security
  Provider: India
  can utilize the strategic location of these islands to act as a ‘net
  security provider’ in the region and promote stability in the Indo-Pacific
  region.

Economic Importance

• Exclusive
  Economic Zone (EEZ): Nearly 30% of India’s Exclusive Economic Zone (EEZ) is
  derived from the maritime boundaries around these islands.
• Fisheries
  Potential: The
  rich marine biodiversity surrounding the islands provides significant
  fisheries potential.
• Tourism
  Potential: The
  scenic beauty, diverse ecosystems, and historical significance make these
  islands a prime tourist destination.

Historical Importance

• Cellular Jail
  (Kala Pani): Freedom
  fighters were imprisoned here during the colonial era, and the jail
  remains a testament to the sacrifices made for the nation’s freedom.
• Azad Hind
  Fauj Headquarters: During World War II, the Azad Hind Fauj, led by Netaji
  Subhas Chandra Bose, had its headquarters in the Andaman and Nicobar
  Islands.

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Side Topic: Great Nicobar Island Development Project

• The government has sanctioned
  a Rs 72,000 crore development project for Great Nicobar.
• It is strategically important
  due to its equidistance from Klang, Colombo and Singapore and its position
  in the vicinity of the East-West international shipping corridor.

• Lakshadweep group of islands are situated in the Arabian Sea 
• It is a group of 36 islands. But 4 islands are most important, which includes
  1. Amini 
  2. Kavaratti 
  3. Minicoy
  4. Agatti

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Structure

• These islands are part of Reunion Vulcanism. The base of the islands is provided by volcanic lava.
• The entire Lakshadweep islands are made up of Coral Deposits.

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Some Important Channel

8 Degree channel	Separates Minicoy from Maldives
9 Degree channel	Separates Minicoy from the main Lakshadweep archipelago

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Population

• The population of these islands is 60,650, with a Muslim majority. But Minicoy has a Christian majority.
• The entire indigenous population of the islands is Scheduled tribe, but tribes aren’t named.
• The majority of people speak Malayalam (except in Minicoy, where people use Mahl written in Divehi script (same as Maldives)

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Polity

• These islands were earlier known as Lacadive, Minicoy and Amindivi Islands. The name Lakshadweep was adopted in 1973
• Lakshadweep Islands is a UT under the administered control of Lt. Governor.
• Kavaratti is the administrative capital of Lakshadweep
• It is under the jurisdiction of Ernakulam High Court 

a. Sriharikota Island

• It is located in Andhra Pradesh between the Bay of Bengal and Pulicat Lake. 
• Sriharikota is one of ISRO’s satellite launching stations.

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b. Wheeler Island / Abdul Kalam Island

• It is located off the coast of Odisha.
• It serves as a missile testing site.

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c. Pamban Island

• It is situated in the Gulf of Mannar between India and Sri Lanka . 
• This island is covered with white sand.

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d. Majauli Island

• It is located in Assam. 
• It is a riverine island situated in the Brahmaputra River. It is the largest riverine island in the world.
• The island is under severe ecological threat due to extensive soil erosion of its banks.
• It is home to Assamese neo-Vaishnavite culture.

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e. Diu Island

• It is located on the coast of Kathiawar.
• It is famous for the historical Diu Fort (built by the Portuguese) and beautiful beaches.
• Note: Daman is not an island. 

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f. Sagar Island

• It is located in the Ganga Delta in the Bay of Bengal.
• It is an important place for Hindu pilgrimage.

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g.  Phumdis / Floating Islands

• They are located in Manipur 
• It is part of Keibul Lamjao National Park.
• It is famous for Sangai (breed of Deer)

• Raw Material: The hides and skin of cows, goats, sheep, and buffaloes serve as the primary raw materials for the leather industry. India, being one of the largest producers of livestock, provides a substantial supply of raw hides and skins.
• Water: Water is a vital component in the tanning process, where raw hides are treated to become leather. Tanneries are often established near rivers or lakes to ensure a continuous and sufficient water supply. For instance, tanneries in Kanpur, Uttar Pradesh, utilize the water from the Ganges River.   
• Labour Availability: The leather industry is labour-intensive, involving various stages like cleaning, dyeing, cutting, and stitching. It requires huge numbers of skilled and unskilled labourers.
• Concentrated Demand: The presence of a concentrated demand for leather products, both domestically and internationally, plays a crucial role in shaping the leather industry. 

• Historical Factor: The rich history of Mughal patronage in the region played a significant role in developing leather craftsmanship in UP.
• Water Availability: Major leather centres like Kanpur are strategically located along the banks of the Ganga River. 
• Demand: 
  • UP is one of the most populous regions in India. The high population density creates a consistent demand for leather products like footwear.
  • UP has a well-developed sports industry, and leather is an essential material used in sports equipment manufacturing—for instance, cricket balls and footballs.
  • The proximity of UP to Haryana, a state with a robust automobile industry, creates a leather market for car seats and interiors. 
• Government Policies: Supportive government policies, subsidies, and initiatives have encouraged entrepreneurs and investors to establish and expand leather-related businesses in UP. 

• Historical Reasons: During World War II, the soaring demand for army boots and belts acted as a catalyst for the leather industry in West Bengal. Consequently, Bata has also set up their plant in West Bengal at the place now known as Batanagar (in 24 South Pargana)  
• Cheap Labour: West Bengal and its neighbouring states, such as Bihar, provide a vast pool of skilled and unskilled workers at competitive wages.
• Fresh Water: West Bengal benefits from the presence of the Hugli River, providing a consistent and ample supply of fresh water required for leather manufacturing
• Market
• Domestic Demand: West Bengal, a populous state with a growing economy, offers a robust domestic market for leather products. 
• Port Facilities: West Bengal has strategic ports such as Kolkata Port and Haldia Port. These ports facilitate the export of leather products to international markets.

Inadequate Supply of Hide and Low Hide Quality:

• Cultural Factors: In India, cattle are considered sacred and a source of wealth. Unlike the US and other Western countries, Indians do not sell their cattle for slaughter.
• Laws on Cow Slaughter: Several states have imposed bans on beef and cow slaughter, negatively impacting the leather industry.
• Right-Wing Vigilantism: Right-wing vigilantism frequently harms people from castes involved in flaying, leading many to abandon the profession, causing difficulties when cattle die and need to be flayed.
• Poor Quality Hide: Flaying, considered polluting work, is done by lower caste individuals without proper scientific equipment, resulting in lower hide quality.

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Problems with Tanning:

• Tanning Pollution: Tanning, done with Chromium salt and sulfides, pollutes rivers when untreated wastewater is dumped, rendering the water unsuitable for drinking and commercial purposes.

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Competition from China:

• During the 1980s and 90s, the US leather industry moved to China due to strict environmental laws, enabling China to acquire US technology and capital.

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The dominance of MSMEs

• In India, Micro, Small, and Medium Enterprises (MSMEs) dominate the leather sector, making it challenging to compete with global players.

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Lower Demand:

• Religious Considerations: Religious beliefs in India affect leather usage, leading to lower demand for leather products.
• Climatic Conditions: Warm weather makes leather jackets and garments unsuitable, affecting demand.
• Price Consciousness: Indian consumers prefer cheaper synthetic substitutes due to price consciousness.

India is the major producer of jute, along with Bangladesh. China and Pakistan are other notable producers.

• Bangladesh: Bangladesh is the world’s largest producer of jute. The jute industry is a vital sector of their economy, employing millions.
• India:
  • West Bengal: The majority of India’s jute mills are concentrated in West Bengal 
  • Andhra Pradesh: Andhra Pradesh also has a significant jute industry.
• China: China also has a notable jute industry, with mills in cities like Nantong and Qingdao.
• Pakistan: Pakistan has a smaller but significant jute industry, mainly centred around cities like Karachi and Lahore.

• Raw material: The majority of jute is cultivated in West Bengal. The favourable climate and soil conditions in this region are ideal for jute cultivation.
• Energy: Proximity to coal mines in Raniganj and Jharia provides a stable energy source for jute processing.
• Water: Jute processing requires substantial amounts of water. The Hooghly River (a distributary of the Ganges) in West Bengal ensures a reliable and abundant water supply for the jute mills.
• Cheap Labour: West Bengal, along with states like Bihar and Uttar Pradesh, provides a large pool of skilled and unskilled labour at relatively low wages.
• Capital: Kolkata, the capital of West Bengal, had well-established banking and financial facilities during the British colonial period. 

• Geographical Disadvantages: After partition, jute mills remained in India while the prime jute-producing regions ended up in Bangladesh.
• Intense Competition from Bangladesh: Bangladesh adopted modern technology in jute production, thus reducing production costs and making their products more competitive in the global market.
• Labour Union Problems: Frequent strikes and disputes in jute mills hindered regular operations, affecting overall productivity.
• Competition from Synthetic Packing: The growing usage of synthetic materials for packaging has decreased the demand for jute products.
• Lack of Marketing Strategy for Eco-Friendly Appeal: There are insufficient efforts in promoting jute as an eco-friendly and biodegradable material in international markets.