Opportunities for India in electronics manufacturing and supply chain

The India Electronics and Semiconductor Association (IESA) has organized a series of talks in the IESA Leader Speak event. The first part was held today.

Inaugurating the event, Dr. Satya Gupta, Chairman, IESA and CEO, Seedeyas Innovations, said that we are doing a multiseries leadership talk. The IESA has different members across the various parts of the country. We have the IESA NCR and Hyderabad chapters. We are starting a Bangalore and Silicon Valley, USA, chapters. We are also working with the government, academia and citizens/society.

The global ESDM industry will likely grow at below 5% till 2025. The Indian ESDM industry will witness 21% CAGR growth projected till 2025. The market demand is the biggest driver. Embedded software is also doing very strong. We do not have a domestic semiconductor manufacturing set up as yet. We are now focusing on manufacturing, develop start-ups and products, especially, healthcare, transportation, agriculture and education, do design and R&D, and develop technology and initiatives for the society.

The IESA has core initiative groups (CIGs). These are in manufacturing, government relations, member connect, automotive and EVs, etc. We are looking at 1K startups, 10K IPs/patents, and generate 1,000K jobs. The IESA Silicon Valley Chapter will be set up by next year. The IESA Foundation is meant for CSR activities, and develop technology for social innovation.

Six megatrends
Ganesh Moorthy, President and COO, Microchip Technology, said Microchip is a leading total solutions provider. We do high-performance standard and specialized MCUs, DSCs, and MPUs, FPGA solutions, analog, etc. Microchip has had 118 consecutive quarters of profitability. We serve over 120,000 customers worldwide. Asia has 52.2% of revenue, with 26.1% from Americas. Europe has the remainder of the revenue.

Microchip has 20 different factories, with six high-volume factories and 14 specialty factories. We opened the Bangalore development center in 2000. Now, we have centers in Chennai and Hyderabad, with over 1,800 employees. We have over 1,500 customers in India, and are serving automotive, industrial, consumer, aerospace and defense.

There are six megatrends driving the industry over the next 5-10 years. These are: 5G, IoT, data centers, electric vehicles, AI/ML, and ADAS/autonomous driving. These are spread across industrial, data center and computing, automotive, communications, aerospace and defense, and consumer.

There are some supply chain challenges. The electronics and semiconductor supply chains have evolved over time and become reasonably resilient. Disasters, like the tsunami in Japan, test the supply chain resiliency. This can result in the geographic shifts. It can also expose the weaknesses in the supply chain sub-layers. There are new challenges emerging from trade tensions, IP protection, etc., as well.

Manufacturing requires significant predictability and reliability. Discipline is a very important mindset. Semiconductor manufacturing has high fixed cost. You also need a continuous improvement mindset. Quality, cost, yield, cycle time and efficiency are the life blood of manufacturing. Manufacturing investments are made with a long-term view. It will help with consistent government policies. We need favorable tax treatment as well. India has demonstrated competitive advantage with intellectual assets. However, is India ready to gain manufacturing market share with capital assets? We have the opportunity.

India opportunities
Manish Bhatia, EVP, Global Operations, Micron Technology noted that there are emerging trends and changes in global electronics and semiconductor supply chain. There are India opportunities as well.

The memory and storage industry revenue was $134 billion in 2017-19. Growth of data is driving the healthy demand. We are seeing demand from data centers (122% growth from CY19 to CY 23), mobile (31% growth in same period), automobile (148% growth in same period), industrial and IoT (75% growth in the same period). We also see 5G as a key growth factor. DRAM and NAND now are driving the growth in semiconductor memory. It is becoming more essential as we move on, and are growing faster than the semiconductor industry.

Micron has grown from zero to over 1,200 members inside a year, in India. Micron India is an emerging hub in Micron's global delivery network. We are developing world-class SSDs and manage NAND high-value system solutions. We are also growing the ASIC controller capabilities, and build the 3D XPoint system solution team in Bangalore. We have a technology service for development of mobile units. We have also implemented product-enabled solutions.

Today, Micron is also moving lab infrastructure, to facilitate development. Lot of innovation is coming out. We are looking at supply chain and development resiliency. We are trying to enable more remote automation, augmented VR tools, etc. The Covid-19 has forced us to rethink about how we are conducting our operations. We are thinking of new ways to collaborate and operate our business. It could also be a perfect time for blockchain to take off.

There is a $30 billion plant coming up in China by Unigroup. There are a couple of manufacturers who are starting manufacturing in China with some government support. You can build fabs and learn how to ramp up production in the fabs. It will take time, but we are watching very carefully.

Tomorrow's event by the IESA will look at the opportunities and challenges for the electronics and semiconductor startups in the post Covid-19 era.