India starts to realise its chip vision

India starts to realise its chip vision

Analysis: Billions flow to semiconductor sector, with the promise of more to come.

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India’s semiconductor manufacturing ambitions are being realised with US$13 billion in government and private backing, and the promise of an expansion of incentives on offer.

Earlier this month, semiconductor consortium ISMC said it would spend US$3 billion on a fab at a 150-acre site in the Indian state of Karnataka.

Karnataka government sources said ISMC’s proposed 65-nanometer analog semiconductor fabrication unit would employ 1500 people directly over seven years and add another 10,000 jobs in the ancillary ecosystem.

The ISMC announcement coincides with a push by Indian Prime Minister, Narendra Modi, to make India a global hub for semiconductors, backed by an initial US$10 billion fund to lure chipmakers to the country.

During the Semicon India conference held recently in Bengaluru, Karnataka, India’s Minister for Communications, Electronics and Information Technology, Ashwini Vaishnaw, said the country plans to expand incentives and allow global firms to set up factories within six to eight months for semiconductor manufacturing.“

After this first tranche [of US$10 billion of funding] gets utilised, we definitely will go for more,” Vaishnaw said.

He said the Indian semiconductor market, worth US$15 billion in 2020, is estimated to reach US$63 billion by 2026.

The Minister added that the government is serious about making India a hub for the global semiconductor manufacturing ecosystem.

Speaking at the conference, industry experts categorised areas of focus and shared various steps to achieving the semicon mission. 

Memory technologies

Memory and storage are now “truly essential” and can be found anywhere that data is stored or processed, Micron Technology's president and CEO Sanjay Mehrotra said.

“We see memory and storage becoming more and more central to enabling transformational future innovation,” he added. 

Mehotra said the recent industry trends show clear importance for memory and storage with an increase in the value of fast data access. 

“DRAM and NAND revenue growth are outpacing the broader semiconductor industry… customers are demanding platforms with higher densities of advanced memory and storage technology, while DRAM and NAND used to be about 10 percent of semiconductor industry revenues, they now represent three times as much,” he said. 

According to Gartner, in 2022, memory is forecast to account for around 31.4 percent of the US$676 billion overall global semiconductor market.

The research agency added that memory and storage account for the majority of semiconductor wafer production as well, nearly 60 percent of all Silicon wafers produced globally today are for memory and storage. 

Micron’s Mehrotra said that data-driven applications are creating this growth.

Secular drivers

He added that secular drivers like ultrafast fifth-generation mobile telephony (5G) networks and advanced artificial intelligence (AI) systems are expanding the use of memory and storage across the data centre to the intelligent edge and onto billions of connected devices.

“Memory technologies are at the leading edge of semiconductor manufacturing. Data centres, intelligent edge networks, automotive and industrial devices are all high growth areas with tremendous demand,” he said. 

“Our engineering design and delivery teams in Hyderabad and Bangalore will cross the 3200 headcount milestone this quarter and will continue growing rapidly and we expect to have 5000 team members at our sites here in the next two to three years,” Mehrotra said.

Intel’s president of its Foundry Services, Randhir Thakur, said the capabilities that India has built up in supply chain partnerships, innovation, entrepreneurship, and talent are the right tools for the next step in developing the industry.

With Intel planning to accelerate the growth of the open ecosystem with a US$1 billion innovation fund, Thakur said the combination of open IP, open-source software, Intel Open Foundry platform and ecosystem investments will “exponentially accelerate the growth of the semiconductor industry in India”.

Local production

Vedanta Group's Global managing director of display and semiconductor business, Akarsh Hebbar, said his company expects to start the commercial supply of display units and electronic chips in the 28-nanometre category by the end of 2024.

The Vedanta Group is one of the five companies, including ISMC, which the government announced in February had put in applications worth US$20.5 billion for semicon investment.

Display manufacturing is less complicated than semiconductor fab and "our mass production will begin within 6-8 months of setting up of our factory", within 2024, Hebbar said. 

“Semiconductor (production) will begin by the end of 2025 and may spill over to 2026,” he added. 

Hebbar said Vedanta was looking for tech partners with the flexibility to address all the range of products that India needs at the get-go in the display panel manufacturing space.

“We aim towards integrated semiconductor and display factories... We do have assembling units coming up and this can help to put ourselves on the global value chain,” he added. 

IBM Research’s Rama Divakaruni said India’s strength lies in design and now it has the “opportunity to do distributed silicon computing, just like all distributed computing at the package level”. 

He said it is the right time for the government to incentivise startups, small and medium companies or size companies and get them to invest to add value and get their designs done in India. 

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