Memory Chip

Context: New companies are likely to invest in India to manufacture memory chips while existing investors will scale up production to address the demand-supply gap in the segment, Union Minister Ashwini Vaishnaw said.

What are memory chips?

• Memory chips are semiconductor devices that use electronic circuits to store digital information, serving as the cornerstone of the information age.
• They are essential components in nearly all electronic devices, from industrial control systems to cloud computing servers, smart terminals, and AI infrastructure.
• These chips are part of the broader integrated circuit (IC) family, which makes up over 80% of the semiconductor industry, with memory chips representing the largest branch of the IC market.
• Memory chips are broadly classified into two types: volatile and non-volatile memory.
• Volatile memory requires continuous power to retain data and includes Dynamic Random Access Memory (DRAM) and Static Random Access Memory (SRAM).
• Non-volatile memory can preserve data even after power is removed, with Flash memory—subdivided into NAND and NOR types—being the dominant form.
• The global semiconductor memory market is dominated by DRAM and NAND Flash.

Why are they essential?

• Powering Everyday Electronics: Memory chips are crucial for the production of consumer devices including smartphones, laptops, tablets, and wearables. For a mid-range smartphone, memory can represent 15-20% of the total bill of materials (BOM), while for a high-end flagship device, it can be even higher.
• Enabling AI and Data Centres: The explosive growth of generative artificial intelligence has dramatically increased demand for memory chips. AI systems require massive amounts of high-speed memory, with a newer AI chip using 7.2 times more HBM than earlier generations, and a full system using about 65 times more.
• Fuelling a Global Shortage: The global semiconductor ecosystem is experiencing an unprecedented memory chip shortage that began in late 2025 and could persist well into 2027.
• Impacting the Broader Economy: The higher memory chip prices have led to a rise in production costs for a range of electronic products, including smartphones and laptops.

What measures have been taken to augment the production of memory chips in India?

• Financial and Policy Support: The Semicon India Programme (₹76,000 crore) provides 50% fiscal support for ATMP/OSAT facilities; ₹22,500 crore for Micron; ₹3,700 crore for HCL-Foxconn JV.
• Flagship Manufacturing Facility: Micron Technology’s $2.75 billion ATMP plant in Sanand, Gujarat - India’s first commercial semiconductor assembly facility, inaugurated in February 2026.
• Planned Expansions by Global Leaders: SK Hynix in preliminary talks to set up a memory chip assembly and testing facility; HCL Group-Foxconn JV (₹3,700 crore) for OSAT facility in Greater Noida.
• Indigenous Manufacturing Initiatives: MiPhi Semiconductors (JV of Micromax & Taiwan's Phison) focused on AI-driven NAND SSDs designed and manufactured in India.
• Future-Focused Policy Direction (ISM 2.0): Prioritises chip design, local manufacturing of semiconductor equipment, HBM packaging for AI data centres, talent development, and extending support to supply chain players.

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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH