India’s Semiconductor Journey

India lost in semiconductor race in 80s due to some wrong decisions n today India is behind 12 generations in Global Semiconductor race.

India got opportunity again n again but India kept losing. Semiconductor or better known as Chip or processor is most imp component today.

From mobile phone to computers, Games, Cars, smart appliances, defense equipment and even Satellite. All r dependent on semiconductors

(Chip). If u remember long delivery time of Cars in 2022 It was due to shortage of semiconductor (Chips) because India doesn't manufactures Chips. India imports 100% of its semiconductor needs (approx. $15 billion in 2020) with 37% coming from China. This demand is expected to increase to $32 billion in 2025 with use of 5G. Currently Taiwan, South Korea and China are major chip making countries. It’s Rs 37.4 lac crore industry today.

Chip making involves 3 stages

1. Design

2. Fabrication (Chip manufacturing)

3. Testing, assembling etc

India have 1 and 3 but India doesn't have no 2 : Fabrication. There are some companies who do step 1 to 3 like intel they are called IDM : Integrated device manufacturer, ARM, Nvidia, Qualcomm, Apple do only design. They outsource fabrication (wafer processing) and assembling. When we talk abt Chip manufacturing we will talk abt step 2. Chip fabrication, which is done in big big manufacturing plants which are call fabrication foundries (FAB)

These FAB are main job providers.

Now if u have understood basics then lets understand How India missed this Bus ,And it starts from 1960. 1960 : A company Fairchild Semiconductor considered building a FAB in India, but due to Indian bureaucracy, They left India n went to Malaysia. 

1962 : Govt company Bharat Electronics Ltd. set up a FAB to manufacture silicon and germanium transistors. But again same story. BEL couldn’t match global quality and price standards, and had to be shut down.

1987 : IISc professor A.R. Vasudeva Murthy helped to establish Metkem Silicon Ltd which, in partnership with Bharat Electronics Limited (BEL), to produce semiconductors. That was the moment, This could have catalyzed an electronics revolution in India. But again bad luck of India, without govt support, especially promised supply of subsidized electricity, Metkem couldn’t produce high quality polysilicon chips and they failed. 

1984 : Most tragic story is- Semiconductor Complex Ltd. (SCL), Chandigarh. Starting with a 5000 nm process and advanced to the 800 nm technology. It was the cutting edge only a year or two before. At that time China and Taiwan had not even entered the FAB space. But the entire complex was burnt in fire in 1989

In 2006 : MMS govt declared first Indian semiconductor policy but it always remained on papers. Do u know how long it took them for next step. It was 6 years.

In 2011 they invited expression of interest to foreign companies to Invest in India. MMS govt was never serious for semiconductor manufacturing in India. Even in 2013 World Semiconductor Council was forced to write a letter to MMS govt for cooperation in promotion of semiconductor Industry in India. 

2005: a major MNC semiconductor company started operations in South India but they faced roadblocks at each step. They imported equipment from US. Forget any concessions, they were levied heavy import duties and had to pay huge sums as demurrage. They asked help from MMS govt. But MMS govt didn't help

China grabbed this opportunity and welcomed the project, giving the company everything it needed and they left India n moved to China

Another Chip MNC was in process of setting up their FAB in India withdrew after seeing horrific experience of this MNC. Chip plant requires huge investment and huge electricity supply.

But till 2014, There was no vision, no political will to support, infrastructure was absent and there was no market to promise investors.

After 2014, Modi govt built massive infrastructure in India.  India became major mobile phone manufacturer, energy self sufficient. Our economy is fairly mature now.

Chip manufacturing requires huge support from Govt. US has offered $25 billion to TSMC  (Taiwan Semiconductor Manufacturing Company) to set up a FAB in Arizona and proposed $52 bn in funding through the CHIPS Act to subsidize companies to make their chips in the US. Under leadership of PM Modi, a comprehensive semiconductor program formulated to provide uniform incentive of 50% to support design, manufacturing and packaging. Program also supports R&D, talent and capacity building. Micron which is IDM in chip making is setting up assembly, testing, marking, and packaging (ATMP) facility in India.

GoI approved Micron’s proposal to invest ₹22,516 crores with fiscal support of 50% of actual Capital. This investment will create 20,000 direct and indirect job opportunities in 5 years, besides creating a massive ecosystem It will give us skilled manpower. Presence of a global semiconductor company like Micron will also give confidence to other global semiconductor companies. Foxconn has also announced that they are preparing to apply for Silicon FAB and Display FAB. Similarly, Vedanta will also establish FAB with new partners, earlier they were supposed to work in JV with Foxconn but now both will work separately.

India's Semiconductor Conference

2022, Bengaluru : Catalyzing India’s Semiconductor Ecosystem

2023, New Delhi - Supply Chain Ecosystem

2023, Gandhinagar - Catalyzing India’s Semiconductor Ecosystem

2024, New Delhi - Positioning India as a Trusted Partner in Global semiconductor supply chain

2024 Greater Noida - Positioning India as a Trusted Partner in the Global Semiconductor Supply Chain.

Recently Modi visited Singapore and signed an MoU on Semiconductor cooperation has set ambitious goals to establish at least 10 FAB in next 10 years.

Semiconductor investments in India so far-  

1. Tata in Gujarat- ₹91526 Crore  

2. Tata in Assam- ₹27120 Crore  

3. Micron in Gujarat- ₹22516 Crore  

4. CG Power in Gujarat- ₹7584 Crore  

5. Kaynes in Gujarat- ₹3307 Crore  

6. Tower & Adani in Maharashtra- ₹ 83974 Crore 7. RRP in Maharashtra- ₹24000 Crore

The way Modi govt has done homework n supporting semiconductor industry, we can say India is ready to catch the bus that we missed in 1987 and not only India has joined the race, India is now running like Cheetah.