With India’s semiconductor policy taking a holistic view for the first time and covering all aspects of the ecosystem, such as those relating to capacity building, research and development, and incentives for setting up manufacturing units, Satya Gupta, President VLSI Society of India, and advisor at India Electronics and Semiconductor Association (IESA), is confident about the policy luring large semiconductor players and Indian business houses to participate in a meaningful way.
Speaking to Business Today, Gupta said, “The semiconductor policy announced by the Minister of IT on December 15 is one of the best policies globally. The incentives provided in the policy for semiconductor manufacturing are globally unmatched based on the policies announced by different nations.”
Within three months of announcing the scheme, the government has already received five credible proposals for semiconductors including from ISMC, IGSS, and Vedanta with Foxconn for semiconductor fabs and two proposals from Vedanta and Elest for display fabs.
“Rigorous work is going on towards setting up the 'India Semiconductor Mission'. A large number of proposals have been received for DLI and C2S schemes and parallel work is progressing at a fast pace for setting up the National EDA Grid, IP availability and access to the fab ecosystem. This is only a start and we are going to see more announcements in the next 4-6 weeks,” Gupta added.
Explaining the reason behind why companies such as Intel, Samsung, TSMC, etc. haven’t made any India specific announcement yet, he says that big players don't respond to a request for a quote (RFQ) or a scheme, especially in such a short deadline.
“The key individuals at the highest level from the government, and the potential big investors like Intel, Samsung, TSMC, Micron etc. have to sit down and find a win-win situation. It is also very critical to involve senior advisors from the domestic & global industry in these dialogues. These companies also do their analysis, planning and strategy and act accordingly.”
Responding to Business Today’s question on whether Intel will come to India, Gupta explained that India is offering much more than just the incentives under the scheme. India is one of the fastest-growing markets for electronics, thus, creating demand for semiconductors.
“India has one of the largest talent pools which can be very useful for creating an ecosystem of excellent service to the customers of the foundry. I am very certain one or two of the big players will certainly come to India and take advantage of the opportunity. It can happen in the next couple of weeks to the next couple of months but will certainly happen. I am very confident it will happen because it makes economic and strategic sense,” he argued.
The business of setting up the fab, choosing the right technology and operating the fab efficiently, is the job and strength of the consortium and investors who have put up or are going to put up proposals for silicon, display or compound semiconductor fabs. The government’s job is to facilitate the whole process, help in setting up the right infrastructure, seamless disbursement of incentives in a timely manner, get the clearances, licenses and permits quickly.
Speaking on the kind of handholding the industry would require from the government, Gupta added, “One the most critical thing that the government can do is to create meaningful demand aggregation so that the wafers capacities at the fabs can be fully utilised. This can be done by consolidating the existing demand, implementing PMA wherever applicable, incentivising the large global fabless companies to use Indian Fabs and most important is to immediately starting a mission mode program to develop the 5 most important and high-volume chips working with the industry.”
These are complex high-end standard product chips like apps processor for mobile and tablets, Wi-Fi chips, smart camera chips, e-Passport chips etc. and will take an investment of approximately $500 million to create commercial-grade chips of global standards, quality and cost. This will not only create fantastic volumes for the fabs but will also bring self-reliance to the electronics products giving rise to more Indian electronics products and brands.