Why India’s building a mega semiconductor fab facility

India is going all out to build a world-class semiconductor fabrication facility. The plan is to initially build one mega semiconductor cluster, like Hsinchu in Taiwan or Woodlands Wafer Fab Park in Singapore, Saurabh Gaur, joint secretary in the ministry of electronics & IT, said last week at our webinar in association with the semiconductor industry body VLSI Society of India.
Even a year ago, the majority in the industry believed India needn’t be in a hurry to set up a new-age fab. It’s expensive – at least $4-5 billion. Previous attempts to set one up had failed. Globally, there seemed to be enough capacity.


But there’s been a dramatic months. Chips are in short supply. Far more importantly, every major country is trying to build its own semiconductor capability – because chips are the foundation of today’s digital world, and everyone’s wary of being too dependent on Taiwan, given particularly China’s position on the region. Boston Consulting estimates Taiwan accounts for 92% of the world’s most advanced semiconductor manufacturing capacity.
Gaur said there’s enough economic rationale now for India to build a modern fab. Going by the interest companies like Apple, Samsung, Dell, HP, Acer and Asus have shown in manufacturing their electronic products in India – following the government’s recent production-linked incentive schemes – Gaur estimates India’s share of global electronics manufacturing will rise from 3. 5% now to 10% (or about $300 billion) in 4-5 years, by the time the fab is ready. He said these manufacturing opsemiconductor components from the India fab to have better control of their supply chains.
There’s also optimism because larger semiconductor policy that will be driven in a mission mode by a professional body, with guidance from Indian and global exwhich the government has allogovernment is prepared to take that upto $40-50 billion when necessary. There are plans for small- er fabs and chip packaging units, there are attractive incentives for chip design – an area where India is already very strong – and incentives for research in semiconductors. A lot of this is directed towards creating Indian companies in chip design and semiconductor products.
Satya Gupta, president of the VLSI Society of India, which is holding a major design conference later this month, said there’s a perception globally that India does not have good infrastructure, so it’s important to pre-build a fab park in one location, “where we build power, water, place for gases, for chemicals, easy customs, easy logistics, transportation. ” And while the fab is getting ready, he said, India should identify and focus on some areas of good market demand, where India also has the technology and some level of manufacturing capability. LED driver chips, he said, is one such – we already consume almost 600 million such chips each year, and it can be manufactured with technology India has. Gaur said the SCL (Semiconductor Laboratory) in Mohali is being upgraded to deal with precisely such requirements.
Sambit Sahu, VP of the network and edge group at Intel, said applications around AI, 5G and IoT will need more and more differentiated chips to be built. AI, he noted, is trying to mimic the human brain, but it still doesn’t match even 1% of the brain. “So you can imagine how far we have to go. India can lead in product development in areas where there is huge domestic demand, particularly in the areas of healthcare, education, and agriculture,” he said.
Balajee Sowrirajan, MD of Samsung Semiconductor India R&D Centre, said companies like Samsung, Intel, Qualcomm are all in the midst of these core technologies. All of them have massive R&D centres in India. “We have the right innovation knobs, and we’ve been innovating for many, many years to bring about a fundamental change for the global market. Now, coming closer to home, this is going to be important, if you look at smart cities, smart factories (in India),” he said. The global companies, he said, can also play a big role in collaborating with Indian entrepreneurs to create products for India and the world.

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