Good start for semiconductors in India, but lot more to be done!

Union Cabinet of India has approved the establishment of three semiconductor units under the ‘Development of Semiconductors and Display Manufacturing Ecosystems in India. All three units will start construction within next 100 days.

The approved three semiconductor units are:

* Tata Electronics Pvt Ltd (TEPL) will set up a semiconductor fab in Dholera, Gujarat, in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan.

This fab will be constructed in Dholera, Gujarat. Investment in this fab will be Rs.91,000 crore. As technology partner, PSMC is renowned for its expertise in logic and memory foundry segments. PSMC has six semiconductor foundries in Taiwan. The estimated capacity is estimated to be 50,000 wafer starts per month (WSPM).

* Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit in Morigaon, Assam. This unit will be set up with an investment of Rs.27,000 crore.

TSAT is developing indigenous advanced semiconductor packaging technologies, including flip chip and ISIP (integrated system in package) technologies. The estimated capacity is said to be 48 million per day, for segments such as automotive, electric vehicles, consumer electronics, telecom, mobile phones, etc.

* CG Power, in partnership with Renesas Electronics Corp., Japan and Stars Microelectronics, Thailand, will set up a semiconductor ATMP unit for specialized chips unit in Sanand, Gujarat. This unit will be set up with an investment of Rs.7,600 crore.

Renesas is a leading semiconductor company focussed on specialised chips. It operates 12 semiconductor facilities and is an important player in microcontrollers, analog, power, and SoC products. CG Power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications.

As per the information given, one fab and two ATMP units are apparently coming up. TEPL has to start work on 28nm. Powerchip may be a leading player from Taiwan, but it is not even close to TSMC.

Next, ATMP has been tried before, during Dr. Manmohan Singh tenure, and Tessolve is the major player in India. Raja Manickam, founder and CEO, Tessolve, was said to be heading TSAT as CEO. He may have also moved on to better waters. 

CG Power has been involved with power and distribution transformers, extra high voltage (EHV) and medium voltage (MV) circuit breakers, EHV instrument transformers, switchgears, lightning arrestors, isolators and vacuum interrupters. For industrial, it makes medium and low-voltage rotating machines, drives and stampings. For railways, it provides rolling stock and signaling equipment. 

Semiconductors will be a new area to enter for India, and best of luck to all the companies. Yes, it is indeed an exciting time to be in the semiconductor space, finally. However, all of these announcements will probably give India 0.1% hold in the global semiconductor industry. India needs to do way, and way, much more, than it is doing now!

What happened in 2013?
I am curious! During Dr. Manmohan Singh's tenure, a semiconductor policy was announced with fabs expected to start at 22nm! What has since changed over the decade that has now led to this new step of starting fabs at 28nm? 

Quoting from my article in CIOL,Sept. 2013, the first project stated technology nodes proposed are 90nm, 65nm and 45nm nodes in phase I, 28nm node in phase II with the option of establishing a 22nm node in phase III. The other project stated technology nodes proposed are 90nm, 65nm and 45nm nodes in phase I and 45nm, 28nm and 22nm nodes in phase II. 

Back in 2013, I had said in in CIOL: One, these upcoming fabs in India will probably produce low- to mid-range chips, and some high-end ones at a later stage. Well, two, this does raise a question or two about India's competitive advantage in the wafer fab space! Three, there is lot of material on 450mm fabs, and some of that is available on my blog! Have the Indian semiconductor industry folks paid enough attention to all that? I really have no idea!

Four, only the newer 300mm fabs built with higher ceilings and stronger floors will be able to be upgraded to 450mm, as presented by The Information Network's Dr. Robert Castellano at the Semicon West 2013. Five, what are the likely alternative markets for 200mm and 300mm fabs? These are said to be MEMs and TSV, LEDs and solar PV. Alright, stop right here!

Perhaps, these many product lines will actually be good for India and serve us well, for now, but not for long!

India seems to have either digressed, or lowered its focus from 22nm to 28nm fabs! But, why?

What should India do?
What's done is done! Rather than rest on these current laurels, India should also start developing its own semiconductors separately, and work on specific semiconductor programs for institutes of all types. Also, the top six OSATs or outoutsourced semiconductor assembly and test players have already taken 70% of OSAT market in 2022. Besides investing the most, they are also investing more in the advanced packaging technologies. Hi-end performance packaging is yet another market to look at, and start working. There is need to be involved in 3D stacking, as well. 

Next, chiplets add cost when total area of silicon is larger to enable die-to-die interconnect. Die-to-die interconnect scheme means involving advanced packaging techniques. And, chiplets reduce cost when smaller individual dies have higher fab yield (that save fab cost). We have an opportunity to use lower cost nodes for certain IC functions. 

I mentioned earlier: Micron is a memory major, and, well behind Samsung and SK hynix, in the world. Micron had earlier announced its move to India, following problems in China. That's a separate story altogether. China, in the meanwhile, is catching up with the world in silicon carbide (SiC), processors, memory, also advanced packaging. It has yet to catch up in wafer fab equipment or WFE.

But, make no mistake -- there are several advanced nations, besides China, that are far ahead of India. More importantly, all of these nations have also built their own domestic fabs. India STILL does not have its own domestic fab even after so many years. The fact that there is still no partner found for Vedanta, also bites hard. One hope that this gets resolved very soon. 

What's happening elsewhere?
Now, it is equally very important to keep certain things in mind!

Recently, US Secretary of State, Gina Raimondo announced that USA aims to make 20% of world's leading-edge chips by 2030. Europe has done quite well with its EU Chips Act. It has centers of competence, across Fraunhofer in Germany, Leti in France, and imec in Belgium. Semiconductors will definitely play an important role across all the industries in the future.

AI, despite all its hype, has been aptly summed up by Malcolm Penn, Future Horizons, UK. He said that AI is not a product per se, like an iPhone or laptop. You cannot log into Amazon or Etsy, and buy an AI. Arguably, products like ChatGPT are more artificial plagiarism than intelligence! Also, no chip market has ever taken off based on a $40,000 IC!

A question before the global semiconductor industry now is: How can we pool the other industries into chip design? It will definitely get answered over time. We also need to pull in many more people into fundamental research. 

So far, there is hardly any talks regarding doing research in semiconductors across India. That needs to be addressed, as well. As mentioned earlier, advanced packaging is another area that needs the due attention from India. Next comes the role of chiplets and their development.

Standards should also enable an open packaging ecosystem, and also for chiplets. In fact, chiplets and heterogenous design are among key strategies for future devices to achieve the desired power-performance-area-cost + time-to-market (PPACt) level. This will demand advancements in the related technologies by the international electron device community, and hopefully, we will also see that in India.

Later, Ajai Chowdhry, Founder, EPIC Foundation, Member, Advisory Board, Ministry of Electronics & IT, and co-founder of HCL, said: "Post Covid-19, there is a race to create fabs all over the world. US lost 20 years being dependent on Taiwan and China for electronics. Supply chain issues hit everyone during Covid-19, and cars, white goods, phones, etc., had long waiting periods. The geopolitical situation has totally changed, and in semiconductors, every major economy wants to be self sufficient.

"If China takes over Taiwan, 60% of the world's chip capacity will be gone. Today, chips are in every product. India, as a large country, must be self sufficient in certain areas. Remember, tomorrow’s wars will be fought with semiconductors, and some are happening even now.

"India has a 20-year plan.This $10 billion is just phase 1. US gives 30% cap subsidy to set up. India gives 50% plus 20% by states. Till now, we failed as all our subsidy plans were post investment. After 40 years, we realized that this won’t work, as now, other countries are all drawing investments .Now we can give cap subsidy upfront."

One hopes that the future will see more discussions around these areas.