(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 notably 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 knowledge 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 greatest semiconductor manufacturing firm, the Taiwan Semiconductor Manufacturing Firm (TSMC), was based.
As we speak, nonetheless, whereas TSMC produces 90% of the world’s most refined 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 previous. TSMC’s annual turnover exceeded $70 billion final 12 months, excess of the SCL’s meagre $5 million. And whereas TSMC’s shoppers are a few of the world’s main tech corporations, resembling Apple, AMD and Nvidia, amongst SCL’s prime shoppers is simply ISRO (Indian Area Analysis Organisation). TSMC’s factories are state-of-the-art; SCL is in dire want of modernisation and upgradation.
India’s Powerful Luck
SCL may 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 fireplace broke out within the plant, destroying a lot of the services. Thus far, nobody is aware of if it was an act of sabotage or an accident. The manufacturing facility 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 trade’s international voices, stunned me when he stated he had been monitoring the Indian chip trade for the reason that Nineteen Seventies. “I’ve seen India attempt for this trade my complete profession. There have been solely failures. It will be important for India to achieve success now.” Dan just isn’t incorrect, 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 establishing chip manufacturing tasks, however they didn’t materialise for varied causes.
Micron Mission, A Signal Of Good Issues To Come
It took India over three many years 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 ability might be operational early subsequent 12 months. The plant might 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 are going to arrange a fabrication unit in Dholera. I’m certain the federal government might be extra eager to see the progress of this undertaking as a result of it is India’s first fab unit within the personal sector. Neither firm of their press statements have given a completion date or the prices concerned however in accordance with media reviews, the whole undertaking will price Rs 91,000 crore.
India have witnessed a number of false dawns in the previous few many years, however now issues look like altering, and at a quick pace. There was a time when India couldn’t even dream of manufacturing refined smartphones. That was a website completely captured by China. As we speak, India is a producing hub for iPhones and different smartphone manufacturers. Citing this success story, Prime Minister Narendra Modi stated final 12 months, “We’ve 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 Section
A semiconductor manufacturing ecosystem requires infrastructure for designing, fabrication, analysis, testing, and packaging. Apart from, it wants refined instruments, minerals, and gases to make chips. Whereas India severely lacks large-scale semiconductor fabrication services, it has constructed a strong ecosystem for chip design and associated providers. Main international 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 complicated 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 providers, catering to international shoppers.
“Be taught To Stroll Earlier than You Can Run”
Now, the Modi authorities desires India to change into a fabrication, R&D, testing, and packaging hub. A tall order certainly, contemplating India is barely firstly of the chip race — however not an unimaginable one. I’ve spoken to a number of trade specialists worldwide during the last two years, they usually imagine India can change into a semiconductor hub and a world participant in 10-20 years if it stays as centered, affected person, and dedicated because the Modi authorities seems to be at the moment.
To place India’s efforts in perspective, we must do not forget that it took semiconductor superpowers Taiwan and South Korea many years to succeed in the place they’re within the race at the moment. “Realistically, it will take 10 to twenty years, assuming it’s well-executed. You need to study 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 “a fantastic child step”. To make sure, 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 broadly believed to be the important thing to the success of a semiconductor mission. A bunch of issues are wanted earlier than manufacturing can begin 10-15 years later. This isn’t a easy trade; it requires a whole lot of work and high-end tools and supplies.
1. Funding
In accordance with the Semiconductor Business Affiliation estimates, a state-of-the-art manufacturing manufacturing facility 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 vastly 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 trade since 2022. In opposition to these stark figures, India has managed to inject nearly $15 billion into its semiconductor undertaking.
What India badly wants is personal traders and international gamers.
2. Gases and Mineral Shortages
Semiconductor chip manufacturing basically makes use of greater than 150 kinds of chemical compounds and over 30 kinds 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 imagine that the primary process for India is to create supporting industries for the chip trade to emerge. The difficulty pertains to some basic items, like having a secure energy grid and constant water availability, which make it attainable to construct the semiconductor trade.
4. Political Will
The chip trade 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 might be wanted if India actually is to change into a developed nation by 2047.
5. Expert Manpower
India has manpower in abundance, nevertheless it has a scarcity of the type of expert manpower wanted within the semiconductor trade.
6. Mind Drain
India may obtain its aim of changing into a semiconductor hub in round 5 to 6 years relatively than the traditional 10-20 12 months timeframe if we handle to convey huge Indian expertise, serving international corporations, again dwelling. 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 quite a bit to the Taiwanese-origin executives who obtained their semiconductor experience and experiences within the US. The Taiwanese authorities within the Eighties determined to convey its gifted individuals again to kickstart the semiconductor trade. It paid them salaries on a par with Western corporations. These expat Taiwanese performed an enormous position in making Taiwan a really international 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 any dearth of Indians who’re doing properly 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 suitable circumstances to convey 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 facility will decide the way forward for India’s semiconductor trade.
(Syed Zubair Ahmed is a London-based senior Indian journalist with three many years of expertise with the Western media)
Disclaimer: These are the non-public opinions of the creator
