(That is the second article in a two-part collection on the US-China semiconductor battle, and the place India stands in it. Right here is the primary half)
When Chandrayaan 3 landed on the moon on August 23 final 12 months, there was one place in Mohali that was significantly jubilant: the government-run Semiconductor Laboratory (SCL). It was a private win for SCL’s engineers, the unsung heroes who for months labored on producing all kinds of semiconductors important for controlling and commanding the mission. The spacecraft used chips to allow communication with Earth and navigate its solution to the touchdown vacation spot, utilizing sensors and cameras to transmit information and messages.
Mohali’s SCL is India’s solely well-known chip-making foundry. It started manufacturing in 1984, three years earlier than the world’s largest semiconductor manufacturing firm, the Taiwan Semiconductor Manufacturing Firm (TSMC), was based.
Immediately, nonetheless, whereas TSMC produces 90% of the world’s most subtle and superior semiconductors or microchips, churning out essentially the most valued 5-nanometer (nm) chips in dimension, SCL could make solely legacy chips of 100 nm and above, that are clearly many generations outdated. TSMC’s annual turnover exceeded $70 billion final 12 months, way over the SCL’s meagre $5 million. And whereas TSMC’s shoppers are a number of the world’s main tech corporations, resembling Apple, AMD and Nvidia, amongst SCL’s high shoppers is simply ISRO (Indian House Analysis Organisation). TSMC’s factories are state-of-the-art; SCL is in dire want of modernisation and upgradation.
India’s Robust Luck
SCL might have been TSMC’s largest rival if it weren’t for one very unlucky incident, which pushed India again to the semiconductor darkish ages. On February 27, 1989, a mysterious hearth broke out within the plant, destroying a lot of the amenities. So far, nobody is aware of if it was an act of sabotage or an accident. The manufacturing unit later rose from the ashes, however by then, it was left far behind within the race.
Dan Hutcheson of Canada’s TechInsights firm, one of many business’s world voices, stunned me when he stated he had been monitoring the Indian chip business for the reason that Nineteen Seventies. “I’ve seen India try for this business my total profession. There have been solely failures. It can be crucial for India to achieve success now.” Dan will not be flawed, as India’s semiconductor historical past is made up of a collection of damaged goals and unfulfilled guarantees. A number of multinational corporations tried their luck in organising chip manufacturing tasks, however they didn’t materialise for numerous causes.
Micron Undertaking, A Signal Of Good Issues To Come
It took India over three a long time after the 1989 tragedy to see a constructive improvement in its semiconductor journey. In August final 12 months, a groundbreaking ceremony was held in Sanand, Gujarat, for Micron Expertise’s state-of-the-art semiconductor meeting, testing, and packaging facility. Its bosses declare the power will likely be operational early subsequent 12 months. The plant will likely be accomplished in two phases at a value of $2.75 billion – $825 million being invested by Micron, and the remainder by the Centre and the Gujarat authorities.
The Micron undertaking seems to be the start of the nation’s vivid chip future. For the reason that groundbreaking ceremony final 12 months, 4 new tasks have been introduced, the most recent on Monday when the federal government stated it cleared a proposal of Kaynes Semicon to arrange a semiconductor unit in Sanand. All the brand new items, besides Tata Electronics’ fab unit in Dholera in Gujarat are testing and packaging items. Taiwain’s Powerchip Semiconductor Manufacturing Company (PSMC) and Tata Electronics introduced in February this 12 months that they’ll arrange a fabrication unit in Dholera. I’m certain the federal government will likely be extra eager to see the progress of this undertaking as a result of it is India’s first fab unit within the non-public sector. Neither firm of their press statements have given a completion date or the prices concerned however based on media reviews, the whole undertaking will price Rs 91,000 crore.
India have witnessed a number of false dawns in the previous couple of a long time, however now issues seem like altering, and at a quick pace. There was a time when India couldn’t even dream of manufacturing subtle smartphones. That was a site completely captured by China. Immediately, India is a producing hub for iPhones and different smartphone manufacturers. Citing this success story, Prime Minister Narendra Modi stated final 12 months, “We have now efficiently made India a producing hub for cell phones during the last decade. Now, our subsequent aim is to place the nation as a frontrunner in semiconductor manufacturing.”
India Is Established In Simply One Phase
A semiconductor manufacturing ecosystem requires infrastructure for designing, fabrication, analysis, testing, and packaging. In addition to, it wants subtle instruments, minerals, and gases to make chips. Whereas India severely lacks large-scale semiconductor fabrication amenities, it has constructed a sturdy ecosystem for chip design and associated companies. Main world semiconductor corporations resembling Intel, Qualcomm, Texas Devices, NVIDIA, AMD and Broadcom have established important design and R&D centres in India. Indian engineers contribute to the design of essentially the most advanced chips utilized in cutting-edge applied sciences, from synthetic intelligence to 5G networks. Corporations like Wipro, Tata Elxsi, and HCL Applied sciences additionally present outsourced semiconductor design companies, catering to world shoppers.
“Study To Stroll Earlier than You Can Run”
Now, the Modi authorities desires India to develop into a fabrication, R&D, testing, and packaging hub. A tall order certainly, contemplating India is simply originally of the chip race — however not an inconceivable one. I’ve spoken to a number of business specialists worldwide during the last two years, and so they consider India can develop into a semiconductor hub and a worldwide participant in 10-20 years if it stays as centered, affected person, and dedicated because the Modi authorities seems to be at present.
To place India’s efforts in perspective, we must keep in mind that it took semiconductor superpowers Taiwan and South Korea a long time to achieve the place they’re within the race at present. “Realistically, it’s going to take 10 to twenty years, assuming it’s well-executed. It’s important to be taught to stroll earlier than you’ll be able to run. That is the essential factor – to ensure the Micron undertaking is profitable,” says Hutcheson, who calls the Micron packaging undertaking “an amazing child step”. To make certain, South Korea, Taiwan, and China all began with packaging items.
India’s Challenges
Chip fabrication, which permits for the manufacturing of 5 nm and even 2 nm microchips, is extensively believed to be the important thing to the success of a semiconductor mission. A number of issues are wanted earlier than manufacturing can begin 10-15 years later. This isn’t a easy business; it requires a variety of work and high-end gear and supplies.
1. Funding
In accordance with the Semiconductor Business Affiliation estimates, a state-of-the-art manufacturing manufacturing unit takes a minimal of 10 years to supply chips. The preliminary capital funding and working prices can run as much as wherever between $10 billion and $40 billion. If India goals of being a chi hub, it should make investments massively within the sector within the subsequent 10-15 years. China has been doing simply that, pouring billions of {dollars} into changing into self-reliant in semiconductor manufacturing. The US has pumped in over $100 billion in its personal business since 2022. Towards these stark figures, India has managed to inject nearly $15 billion into its semiconductor undertaking.
What India badly wants is non-public buyers and world gamers.
2. Gases and Mineral Shortages
Semiconductor chip manufacturing primarily makes use of greater than 150 varieties of chemical substances and over 30 varieties of gases and minerals. At current, all these can be found solely in just a few international locations. The problem for India is to be self-reliant on this sector.
3. Supporting Industries
Some specialists consider that the principle activity for India is to create supporting industries for the chip business to emerge. The problem pertains to some staple items, like having a secure energy grid and constant water availability, which make it potential to construct the semiconductor business.
4. Political Will
The chip business is capital-intensive and time-consuming, which requires deep dedication from the federal government and personal gamers alike. It requires the willpower of successive governments to remain within the sport. PM Modi desires India to be a developed financial system by 2047. A protracted-term semiconductor technique will likely be wanted if India actually is to develop into a developed nation by 2047.
5. Expert Manpower
India has manpower in abundance, however it has a scarcity of the form of expert manpower wanted within the semiconductor business.
6. Mind Drain
India might obtain its aim of changing into a semiconductor hub in round 5 to 6 years quite than the standard 10-20 12 months timeframe if we handle to deliver massive Indian expertise, serving world corporations, again house. Can we entice them with equal wage packages and perks? Can nation-building be a motivator? Can we enhance our work tradition to make it extra skilled and productive?
Taiwan’s success story owes so much to the Taiwanese-origin executives who obtained their semiconductor experience and experiences within the US. The Taiwanese authorities within the Eighties determined to deliver its gifted folks again to kickstart the semiconductor business. It paid them salaries on a par with Western corporations. These expat Taiwanese performed an enormous position in making Taiwan a really world chip hub.
South Korea’s chip revolution additionally began after the federal government enticed many Korean specialists working in Japanese corporations to return again and work in Korea.
There isn’t a dearth of Indians who’re doing nicely within the semiconductor enterprise within the US and elsewhere. Round a dozen leaders of the world’s main chip-making corporations are both Indian or of Indian origin. I’ve met a pair. All of them love India. However India must create the fitting circumstances to deliver them again, and in addition cease the mind drain of younger engineering graduates who’re in excessive demand overseas.
A New Daybreak
India is on the cusp of sealing offers with a number of multinational corporations to launch new tasks. The Modi authorities has recognised the truth that if India must be a giant geopolitical participant, it must be the main gentle within the semiconductor enviornment. What follows after the Micron manufacturing unit will decide the way forward for India’s semiconductor business.
(Syed Zubair Ahmed is a London-based senior Indian journalist with three a long time of expertise with the Western media)
Disclaimer: These are the private opinions of the writer
