Semiconductor Sector in India
Context:
- The widely publicised semiconductor policy that was launched in 2021 calls for India to pursue its dreams in the semiconductor industry, and to ensure that neither country’s subsidies will get in the way of those goals, the US Department of Commerce and its Indian counterpart recently signed a memorandum of understanding (MoU 2023).
Recent changes:
- India reportedly consented to American demands. Request for strengthening of semiconductor industry-specific export control laws from the Department of State.
- These appear to be requirements in a drawn-out dance between representatives from the two sides, but can they persuade a major player like Intel to make an investment and construct a new, $10 billion 300mm wafer fabrication facility in India?
- In order to create an electronics ecosystem, the then-central government established the Semi-Conductor Laboratory (SCL) in Mohali in 1983. However, shocks like the liberalisation of the consumer goods market in 1991 and the SCL fire catastrophe crushed these hopes.
- Similar to Aadhar, Aarogya Setu, and the Unified Payments Interface (UPI), SCL Mohali is a technological stack that encourages numerous integrated circuit design startups in India to consider developing for the country.
Moving ahead:
- The institutional foundation for such a shift in focus already exists with SCL’s return to the Ministry of Electronics and Information Technology (MeITy) following a 15-year stint as a laboratory inside the Department of Space, as part of the new semiconductor strategy announcement in 2021. However, no joint venture partner has been found since such an announcement, placing the employment of SCL in jeopardy.
- MeITY currently seems to be focused on persuading Intel to open a fab in India. The wording of the request for proposals and the signals from the MeITY Ministers both imply this. For Intel, which primarily uses a 22nm node and 300mm, the SCL upgrade cost about $10 billion.
- Utilizing recent technological advancements in a class of semiconductors that do not require sophisticated lithography technology, another strategy would be to use the SCL’s human and financial resources to build on what already exists and accelerate the semiconductor mission.
India Semiconductor Mission (ISM):
- The ISM mission is supervised by the Union Ministry of Electronics and ICT (MeitY). It is a part of the comprehensive strategy for the development of the country’s sustainable semiconductor and display ecosystem.
- The programme intends to give businesses that invest in the semiconductor, display manufacturing, and design ecosystem financial help.
ISM components:
- Aiming to draw significant investments for the establishment of semiconductor wafer fabrication facilities in the nation, the Scheme for Setting Up Semiconductor Fabs in India offers financial support to Eligible Applicants for Setting Up Semiconductor Fabs.
- The scheme for the establishment of display fabs in India offers financial assistance to qualified candidates for the establishment of display fabs with the intention of luring significant investments for the establishment of TFT LCD/AMOLED based display fabrication facilities in the nation.
- Compound semiconductors, silicon photonics, sensor manufacturing, and semiconductor assembly, testing, marking, and packaging (ATMP) and OSAT facilities establishment plan for India
- For Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores, and semiconductor linked design, the Design Linked Incentive (DLI) Scheme provides financial incentives and design infrastructure support at various phases of development and deployment.
- The India Semiconductor Mission’s recent initiatives to extend subsidies to international small and medium-sized businesses in the upstream supply chain are applaudable because they will assist an already-existing facility like the SCL. Yet unless combined with the above-described incentives and upgrades aimed at various player groups, this is insufficient on its own.
Conclusion:
- The stakes are enormous because, barring a change in direction on incentive targets, India may once again completely miss out on the semiconductor fabrication bus due to a lack of clarity and inertia. Finally, rather than having a career scientist from the Department of Space, as is the case currently, the SCL needs a full-time director with past “More than Moore” foundry expertise to carry out this strategy over the next five years. This is due to the complexity of the market that must be met.
