Russia-Ukraine war impacted semiconductor industry, says Govt
Friday, 01 April 2022, 16:34 IST
The Russia-Ukraine war has impacted the semiconductor industry, the Ministry of Electronics and Information Technology (MEITY) said in the Rajya Sabha. This impact only adds pressure to the industry already reeling under the effects of the COVID-19 pandemic.
Minister of State for Electronics and Information Technology Rajeev Chandrasekhar, in a reply to the impact of the Russia-Ukraine war on the sector and whether it will have any adverse impact on the automobile industry, said, “Russia-Ukraine conflict has impacted supply chains in numerous sectors, including semiconductor industry. The conflict may have particular impact on the supply of Neon and Hexafluorobutadiene gases, which are an essential element to manufacture semiconductor chips as these are used in the lithography processes for chip production.”
He added that Ukraine and Russia are major sources of Neon and Hexafluorobutadiene gases. The impact of the war might cause extra disruptions and affect supply chains of semiconductors, the minister added.
Chandrasekhar said that the automobile industry is one of the most-affected sectors, along with electronics. The shortage of semiconductors first happened due to the pandemic lockdown and restrictions, he said.
“The supply side problem has transformed into a demand side problem as economies started recovering which increased the consumption of electronic products across various segments. Some key reasons behind the global chip shortage are supply chain disruptions, geographic concentration of electronic manufacturing, rise in demand for digital and electronic products and digital adoption across the world,” the minister said.
The minister alerted the upper house of the extra disruptions and supply chain effects of the semiconductor shortage, which could further constrain electronics and auto industries.
He also said that the government’s semiconductor programme with an outlay of Rs 76,000 crore for the development of a semiconductor and display manufacturing ecosystem is one of the measures to boost the ecosystem.
Chandrasekhar also said that schemes to set up semiconductor fabs, display fabs, and Design Linked Incentive schemes have been rolled out by the government, along with a scheme to set up compound semiconductors, silicon photonics, sensors fab and semiconductor assembly, testing, marking and packaging (ATMP), and OSAT facilities in India.
Minister of State for Electronics and Information Technology Rajeev Chandrasekhar, in a reply to the impact of the Russia-Ukraine war on the sector and whether it will have any adverse impact on the automobile industry, said, “Russia-Ukraine conflict has impacted supply chains in numerous sectors, including semiconductor industry. The conflict may have particular impact on the supply of Neon and Hexafluorobutadiene gases, which are an essential element to manufacture semiconductor chips as these are used in the lithography processes for chip production.”
He added that Ukraine and Russia are major sources of Neon and Hexafluorobutadiene gases. The impact of the war might cause extra disruptions and affect supply chains of semiconductors, the minister added.
Chandrasekhar said that the automobile industry is one of the most-affected sectors, along with electronics. The shortage of semiconductors first happened due to the pandemic lockdown and restrictions, he said.
“The supply side problem has transformed into a demand side problem as economies started recovering which increased the consumption of electronic products across various segments. Some key reasons behind the global chip shortage are supply chain disruptions, geographic concentration of electronic manufacturing, rise in demand for digital and electronic products and digital adoption across the world,” the minister said.
The minister alerted the upper house of the extra disruptions and supply chain effects of the semiconductor shortage, which could further constrain electronics and auto industries.
He also said that the government’s semiconductor programme with an outlay of Rs 76,000 crore for the development of a semiconductor and display manufacturing ecosystem is one of the measures to boost the ecosystem.
Chandrasekhar also said that schemes to set up semiconductor fabs, display fabs, and Design Linked Incentive schemes have been rolled out by the government, along with a scheme to set up compound semiconductors, silicon photonics, sensors fab and semiconductor assembly, testing, marking and packaging (ATMP), and OSAT facilities in India.
