EXCLUSIVE: To achieve its semiconductor dream, Indian govt should act fast, says expert

As many experts have noted, India, under the Ministry of Electronics and Information Technology (MEITY), is actively working towards establishing a semiconductor manufacturing ecosystem here. For this, the government even recently announced a Rs 76,000 crore semiconductor scheme, that received five credible proposals. Amidst all these developments, Arun Mampazhy, a semiconductor veteran and analyst told Business Today that India is close to realising its many decades' old dream of commercial fabs, provided government acts fast.

“For silicon fabs, out of the current proposals received, from the information that is available in the public domain, ISMC's 65 nm (nano metre) looks most promising - technology wise as well as for its 50 per cent fab-fill offer from Tower Semiconductor. According to market studies, they have good resources to do feasibility of land and infrastructure offers from state government. I believe they also have a consortium with defence PSUs and some reputed private industries as partners who could also be future customers. The government should fast track ISMC proposal.”

The Rs 76,000 crore-scheme that the government announced on December 15 last year had received five proposals as of February 15, 2022, including three for silicon fabs and two for display fabs. First is Vedanta in JV with Foxconn, second being the Singapore-headquartered IGSS Ventures pte and then third in silicon fab being ISMC. ISMC is a proposal by Abu Dhabi-based NextOrbit Ventures in partnership with Tower Semiconductor (an Israel based leading foundry of high-value analog semiconductor solutions which Intel will be acquiring for $5.4 billion). The applications have been received for setting up 28 nm to 65 nm semiconductor fabs with capacity of approx. 120,000 wafers per month and the projected investment of $13.6 billion wherein fiscal support from the central government is being sought for nearly $5.6 billion.

Speaking about other proposals received, he added, “Vedanta-Foxconn is yet to reveal publicly if they are getting a 28 nm technology that is production-grade. Without that information, it is difficult to say how reliable their proposal is.”

"IGSS Ventures will get technology from the reputed research organization IMEC Belgium, which usually provides development grade technology that may take a year or more to mature and give desired yields,” he added.

The government is aggressive about the scheme and is in the process of appointing the head of the India Semicon Mission. For this, as sources have revealed, the Indian government has shortlisted around 35 candidates from India and abroad and is interviewing them. The government has recently formed an advisory committee as well.

As Mampazhy argues, while there is so much action, India should be mindful of the previous mistakes as well. For instance, according to the veteran, Tower Semiconductors has been reaching out to India for at least 12 years now. Also, India should not insist that it's "either the best or nothing". The government has to be practical, he said.

“Even when software and services industries picked up pace in India since 90s, lack of enough emphasis and incentives for hardware manufacturing, including fabs, hurt India for 3 decades. Many of the fab proposals that came between 2007-2016 failed to take off due to a variety of reasons like no clear policy and handholding from government and slow responses in general. Too much emphasis on wanting the latest tech of the time and ignoring mature node of the time proposals. These mature node proposals could have made India a proven destination by now,” added Mampazhy, who is an MS from the University of Maryland in semiconductor fabrication and has over a decade of industry expertise.

Speaking on what more is required from the government, he said: “After the two new ministers took over in July 2021, MEITY did show speed by releasing policy in December and making public the applicant info in February. However, after that, the review and approval process seem to be going a little slow - wonder if lack of expertise or manpower at India Semiconductor Mission (ISM) is a cause.”

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