India’s semiconductor mission might need a compass
#GS03
Context:
- The United States Department of Commerce and its Indian counterpart have recently concluded a memorandum of understanding in March 2023 to ensure that subsidies by each country do not come in the way of India’s semiconductor dreams, as espoused by the much-publicised semiconductor policy launched in December 2021. The U.S. Department of State has also engaged with India to beef up sector-specific export control laws in the semiconductor space — which India has agreed to, as in recent media reports.
Points to ponder:
- Ensure that each country’s support does not hinder India’s Semiconductor ambitions. India intends to build a new 300 mm wafer manufacturing facility that will cost more than $10 billion, for which we are pursuing funding from Intel. However, there has been a dearth of interest in intelligence.
- The then-Central Government established the Semi-Conductor Laboratory (SCL) in Mohali in 1983. India’s goals were harmed by the opening of consumer products markets in 1991 and a fire that broke out at the SCL in 1989. Despite some support from the federal government, the building was never considered groundbreaking. However, this could be a suitable starting point for India’s goals.
- The United States Department of Commerce and India’s Ministry of Commerce and Industry have signed a memorandum of understanding to ensure that subsidies by each country do not come in the way of India’s semiconductor dreams.
- The U.S. Department of State has engaged with India to strengthen sector-specific export control laws in the semiconductor space, which India has agreed to.
- The Indian government has been courting Intel to invest in India and set up a greenfield 300mm wafer fabrication plant, but it seems unlikely given Intel’s current focus on setting up fabs within the U.S.
- The Semi-Conductor Laboratory (SCL) in Mohali, India, was set up in 1983 with the vision of creating an electronics ecosystem but has remained largely unfulfilled due to various factors, including fire and shocks of market liberalization.
- The SCL can be viewed as a technology stack acting as a force multiplier effect, encouraging many integrated circuit design startups in India to consider designing for India.
- The transfer of SCL back to the Ministry of Electronics and Information Technology (MeITY) as part of the new semiconductor policy announcement in December 2021 provides an institutional framework for a shift in focus.
- An alternate approach could be to leverage human and capital assets at the SCL to jumpstart the semiconductor mission by taking advantage of recent technological breakthroughs in a class of semiconductors that do not need advanced lithography equipment.
- In this scenario, an investment of $50-$100 million may result in the development of Indian solutions for automotive electronics, PV-Inverters, 5G infra-power amplifiers, and railway electronics.
- The upgrade has to be backed by subsidies aimed at fabless design houses with proven design (sales of >$100 million per year) willing to fabricate at the SCL in the 180nm+ node (and possibly transfer process intellectual patents if they have any).
- The recent efforts by the India Semiconductor Mission to open up subsidies to global small and medium-sized enterprises in the upstream supply chain are welcome, but this is not enough unless coupled with the incentives defined above and upgrades targeted at different sets of players.
- The SCL needs a full-time director with prior “More than Moore” foundry experience to execute this vision in the next five years.
Possible Way forward:
- After a 15-year tenure as a laboratory within the Department of Space, SCL was recently transferred back to the Ministry of Electronics and Information Technology, but no joint venture partner has been identified. Since then, the Ministry has been attempting to gather intelligence.
- An alternative strategy is to use the SCL’s people and financial assets to expand on what already exists in a focused way in a class of semiconductors that do not require sophisticated lithography equipment. Focus on the >180 mm node segment, which would require less investment and could result in the creation of Indian solutions for car electronics, producing the Indian equivalent of Bosch, Siemens, and others.
