No big investment in semiconductor manufacturing recently, but interest rises: Industry body

With the government's focus on Atma Nirbhar Bharat, there have been big investments in electronics manufacturing. Even though the government is extending its full support, realising the strategic importance of Electronics and Semiconductors, there hasn't been big investments in semiconductor manufacturing recently.

"We are seeing green shoots of interest in semiconductor manufacturing especially for ATMP (OSAT). Multiple companies are exploring these possibilities. The other area which is gaining traction is speciality semiconductor fab to produce devices for power electronics like GaN or Silicon Carbide (SiC) which are used in multiple applications such as chargers, electric vehicles, LED drivers, base stations, data centres and many other high-volume applications," says Dr Satya Gupta, Chairman, India Electronics and Semiconductor Association [IESA]).

The recently announced policies (PLI, SPECS and EMC2.0) are the steps in the right direction. "As commercial semiconductor manufacturing cannot be done in academic and government entities in the current environment, it is a responsibility for all of us to find a right commercial model and partner to spearhead these projects with support from the government and industry," adds Gupta.

To build the right ecosystem for electronics products, there is a need for a large number of start-ups to focus on the product development. IESA is working on a plan 1K-10K-100K, which implies 1K products start-ups, 10K IPs created and 100K crore of business value. Out of 1K product start-ups companies, 100 could be fabless chip product area and 900 in the electronics product area. To enable this biggest obstacle is the seed funding. Commenting on the challenges, Gupta adds, "one of the inputs we are getting from global players is, it has to be a long-term engagement. Announcing a policy now after three to five years does not really work. You need an assurance of 15-odd years that the government policies, incentives, and all of those things will remain intact, even if the government changes. Because if the government changes, the incentives will change, and the new government will come and do something different. The time is ripe, and it is no longer an economic need of the country, it has become a strategic need at this hour."

Commenting on India's contribution in the global semiconductor industry, Gupta says, "any chip getting done in the world will have some contribution from Indian semiconductor ecosystem. More than 90 per cent of semiconductor companies have their R&D Centres in India where cutting-edge chip development work takes place. The semiconductor R&D alone produces almost $2.5 billion in revenue and $20 billion including the Electronics Products and Embedded system. The total employment generated is approximately 6 lakhs in India."

The semiconductor consumption in India was about $21 billion in 2019, growing at the rate of 15.1 per cent, according to IESA ESDM Market Report 2020 done in association with F&S. The overall consumption of Electronics component is $31 billion dollars, of which about 2/3 is semiconductors.

Recently, IESA conducted its Vision Summit 2020 event to drive initiatives and policies for the Intelligent Electronics & Semiconductor products and solutions that will propel the government's vision of a self-reliant or an #AtmaNirbharBharat. The event focussed on "Make India an Electronics Product Nation" supported by design and manufacturing, set-up a "National Electronics Mission" - a body similar to ISRO to spearhead all the activities for Electronics and Semiconductor in India. The idea behind the formation of such a body is that it should directly report in PMO and run by professional management with Industry experience. The summit also highlighted the idea of focussing on Electronics Systems in the area of Agriculture, Education, Medical, Automotive and Strategic Security all supported by Telecom Networking Infrastructure built with Indigenous products.

Multiple speakers at the vision summit also recommended creating $500 million of a seed fund for the Fabless companies and creating $500 million of a seed fund for the electronics product companies.

Started in 2005, IESA is an association of electronics and semiconductor companies in India. An organisation of about 300 people, IESA is more as a knowledge partner to the government and other bodies.

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