India is once again trying to deal with this threat. The government in December called for expressions of interest (EoI) for setting up or expanding existing semiconductor wafer and device fabrication (fab) facilities in the country, or even acquisition of semiconductor fabs outside India.
“The EoI shows we are really serious now,” V K Saraswat, member of the Niti Aayog, said at a webinar organised last week by Times Techies, together with the India Electronics & Semiconductor Association (IESA).
Ajai Chowdhry, co-founder of HCL, said that with China at our border, India needs to have a trusted model of all components that come into the country. Currently, a lot of the chips produced by Taiwan go into electronic products that China makes. And 65% of India’s massive electronic imports is from China. That’s a big security concern.
Saraswat said previous attempts by India to establish chip fabs failed because the government’s policy was to reimburse costs only after the private sector set up a project. “The country has realised that there’s no way other than for the government to make upfront investments,” he said.
Raghav Gupta, investment specialist at the government-sponsored Invest India, also said no successful fab ecosystem has come up anywhere in the world without significant government support. The EoI, he said, would give an idea of what exactly the government should provide.
Saurabh Gaur, joint secretary in the electronics & IT ministry, said the EoI response has been good, but said he could not disclose details yet. He said India accounts for 5% of global semiconductor demand. The country’s demand for 28 nm (a measure of the size of transistors in a chip) semiconductor nodes and higher ones is in excess of $25 billion. “And if a typical fab output is of say $3-4 billion, then we see space for fabs that can be ready in the next 2-3 years,” he said.
But almost every panelist, including Gaur, indicated that India’s best opportunities are in what are called compound semiconductors – those made of two or more elements, like gallium nitride, gallium arsenide, silicon carbide. These are used in a variety of emerging products, and these fabs cost much less to set up than the traditional fabs.
Satya Gupta, chairman of IESA, said gallium nitride and silicon carbide are emerging technologies where India can catch up. “We are not much behind. And we can use them to make India, for instance, the power supply capital of the world, build mobile chargers, laptop chargers, the power units in airconditioners, solar inverters, Railways,” he said. The government has supported a gallium nitride R&D facility at IISc, Bangalore.
Amrit Manwani, MD of Sahasra Electronics and the past president of electronics industry association ELCINA, said India needs to be careful about the choice of fab technologies. “In the memory business, which is a very significant segment of the semiconductor business and where we are getting into an ATMP (assembly, test, marking and packing) in Rajasthan, people do not talk of anything less than 12 inch wafers,” he said.
George Paul, CEO of industry association MAIT, also emphasised the need to identify a set of electronic products that India can easily excel in and focus on building an ecosystem for those.
Manish Sharma, CEO of Panasonic India and representative of industry chamber FICCI, said it will become easier to attract large investments if industry and government could find ways to aggregate component demand in an industry or across industries. Gaur said the Indian government is attempting that through efforts like public procurement and India-specific standards for products.
SEMICONDUCTORS ARE STRATEGIC, WE HAVE TO BE SELF-RELIANT
If you look at sensors, IoT devices, computing devices, networking devices, if you look at health, education, agriculture, power grids, railways, everywhere the use of semiconductors is going to be very, very high. It has become commercially very strategic. We have to be self-reliant
VK Saraswat, Member, Niti Aayog
If the EOI does not get the right response, then India should at least import a second hand fab. And get a 28 nm fab going. That is the largest commercial requirement in the country today
Ajai Chowdhry, Co-founder, HCL
We have got a very positive response for compound semiconductor fabs. They require one-fifth to one-tenth the investment of traditional fabs. They are niche, but they are a growing field, one where we can establish an India stamp very vividly
Saurabh Gaur, Joint Secretary, Ministry of Electronics & IT
No successful fab ecosystem has come up anywhere in the world without significant government support
Raghav Gupta, Investment Specialist, Invest India
The local market is highly fragmented – multinationals look at their own supply chain ecosystems globally. So, local subsidiaries (of MNCs) have to come together and look at aggregating demand for economies of scale. That will drive large capital expenditures
Manish Sharma, CEO, Panasonic India, & FICCI representative
It’s good to see the government seriously looking at fabs. But when the wafers are manufactured, they need to be put into a packaged IC. So we need to have a downstream ecosystem. I’m hopeful that will emerge. We are setting up a memory packaging unit
Amrit Manwani, MD, Sahasra Electronics, & Past President, ELCINA
We need to build some `champion products’. We are among the few countries, because of our large population, that can create capacities that are globally competitive. Say, a set-top box, smart meter, surveillance camera. They use standard chips that we can design & make here
George Paul, CEO, MAIT
The most financially viable option is to get an IDM (integrated device manufacturer, one that designs, manufactures, and sells integrated circuit products) to put up a fab. We should vigorously pursue Samsung, because they already have a $10-billion plus market in India
Satya Gupta, Chairman, IESA