The government of India recently approved the setting up of two semiconductor wafer fabrication facilities in the country. It is expected to provide a major boost to the Indian electronics system design and manufacturing (ESDM) ecosystem. A look at the two proposals:
Jaiprakash Associates, along with IBM (USA) and Tower Jazz (Israel). The outlay of the proposed fab is about Rs. 26,300 crore for establishing the fab facility of 40,000 wafer starts per month of 300mm size, using advanced CMOS technology. Technology nodes proposed are 90nm, 65nm and 45nm nodes in phase I, 28nm node in phase II with the option of establishing a 22nm node in phase III. The proposed location is Greater Noida.
Hindustan Semiconductor Manufacturing Corp. (HSMC) along with ST Microelectronics (France/Italy) and Silterra (Malaysia). The outlay of the proposed fab is about Rs. 25,250 crore for the fab facility of 40,000 wafer starts per month of 300mm size, using advanced CMOS technology. Technology nodes proposed are 90nm, 65nm and 45nm nodes in phase I and 45nm, 28nm and 22nm nodes in phase II. The proposed location is Prantij, near Gandhinagar, Gujarat.
Now, this is excellent news for everyone interested in the Indian semiconductor industry.
One look at the numbers above tell me – NONE OF THESE are going to be 450mm fabs! Indeed, both will be 300mm fabs! After waiting for such a long time to even get passed by the Union Cabinet, are these 300mm fabs going to be enough for India? Is the technology choice even right for the upcoming wafer fabs in India? Let’s examine!
As you can probably see, both the projects have placed 22nm right at the very last phase! That’s very interesting!
Intel just showcased its Xeon processor E5-2600 v2 product family a few days back. I distinctly remember Intel’s Narendra Bhandari showing off the 22nm wafer sometime last week during a product launch!
For discussion’s sake, let’s say, a fab in India comes up by say, early 2015. Let’s assume that Phase 1 takes a full year. Which means, Phase 2, where 22nm node would be used, shall only be touched in 2016 or even beyond! Isn’t it? Where will the rest of the global industry be by then?
You are probably aware of the Global 450 Consortium or G450C, which has Intel, IBM, Samsung, GlobalFoundries and TSMC among its members. What is the consortium currently doing? It is a 450mm wafer and equipment development program, which is leveraging on the industry and government investments to demonstrate 450mm process capabilities at the CNSE’s Albany Nanotech Complex. CNSE, also a consortium member, is the SUNY’s College of Nanoscale Science and Engineering!
So, what does all of this tell me?
One, these upcoming fabs in India will probably produce low- to mid-range chips, and some high-end ones at a later stage. Well, two, this does raise a question or two about India’s competitive advantage in the wafer fab space! Three, there is lot of material on 450mm fabs, and some of that is available right here, on this blog! Have the Indian semiconductor industry folks paid enough attention to all that? I really have no idea!
Four, only the newer 300mm fabs built with higher ceilings and stronger floors will be able to be upgraded to 450mm, as presented by The Information Network’s Dr. Robert Castellano at the Semicon West 2013. Five, what are the likely alternative markets for 200mm and 300mm fabs? These are said to be MEMs and TSV, LEDs and solar PV. Alright, stop!
Perhaps, these product lines will be good for India and serve well, for now, but not for long!
Today, the government of India released the National Policy on Electronics titled: Policies to drive national agenda for ICTE: National policy on Electronics 2011 (NPE 2011). One glance is sufficient to note: it is the same old thing in new bottles! There is the dreaded ‘ESDM’ all over again! Easy to say, (but) difficult to manage — electronics system design and manufacturing!
Oh! Where were those folks about 15-20 years ago, who have written this policy, especially when the world had started to make the first movements toward a solid electronics infrastructure back in the mid- to late-1990s? India was and still remains a good 15-20 years behind, as far as electronics and semiconductor industries are concerned! Yes, I am very well aware that there are certain Indian electronics manufacturing companies. They all do creditable work for the global MNCs!
Now, I’ve been requested to write nice things about ESDM! So be it!! First, ESDM does not exist!! Frankly, there is no need to coin any new and special terminology to boost the electronics and semiconductor industries!!! At least, I don’t see any other booming global economy of the world that has coined a special term to do that!! So, why India? All that those nations have done is to focus on R&D and product development, instead of resorting to any terminology! Perhaps, it would be wise for India to follow that path, if it so wishes!
Second, please get specialists to develop the national electronics policy. Else, can I do it?? I am not qualified, though! Besides, I am just a small-time blogger who people don’t really notice!!
Third, where is the electronic components industry in India? It has been said in the policy that ‘electronic components, which are basis of an electronic product, are low volume low weight, cheap and easy to transport across the globe. Moreover, under Information Technology Agreement-1 (ITA-1) of the World Trade Organization, which came into force in 1997, a large number of electronic components and products are bound with zero tariffs making trade unrestricted across international borders. Also, the electronics manufacturing is characterized by high volume and low margins. All these have resulted in the electronics hardware industry being globally integrated with few large global players catering to a large part of the world.’
I am sorry, I don’t agree!
Can you show me one single Indian company manufacturing quality electronic components? There used to be some, in the early 1990s, but those have long vanished! Has anyone ever wondered why? Were their components not good enough? Were the tariffs higher than average? Was it global competition that forced them to exit? Please find out the reasons!
Without the presence of a solid local electronic components industry, forget about ever developing a good, strong and robust Indian electronics and semiconductor industries! Read more…
Last week, I was alerted to a news on a local daily, which simply read: Government invites EoI for semiconductor fabs! With all due respect, what is the need for an Expression of Interest (EoI) in the first place? At least, I fail to understand!!
Having spent most of my life in Hong Kong, Taiwan and China, I’ve seen plenty of fabs come up in the past decade, and before. Why? In the 1990s, no one used to even give a second look at Taiwan Semiconductor Manufacturing Co. (TSMC), which [I don't know if many are aware] started operations in 1987.
Back in the mid- to late-1990s, I had the pleasure of attending several trade shows at the Taipei World Trade Center (TWTC), Taiwan. In fact, I tracked the rise of the Taiwanese and Chinese companies in telecoms and semiconductors. Back then, no one even noticed TSMC, as well as the Chinese backed Semiconductor Manufacturing International Corp. (SMIC). However, the art of manufacturing, which had found its bearings in Taiwan, were steadily shifting to China. I even remember visiting Huawei in the middle of 2000, and later ZTE.
By 2000, many of the Taiwanese firms had moved their operations to China for managing cheaper labor costs. Today, China has assumed gigantic proportions, hasn’t it? Today, even TSMC is in the list of top 10 global semiconductor companies. I had even written a post congratulating TSMC for making it to the top 10 R&D spenders during 2010.
What exactly does this EoI from the government of India set out to achieve? Well, for starters, the EoI should come from the technology companies on whether they are interested to start a fab in India. By the way, do you know what happened to the SIPS or the Indian semiconductor policy announced in 2007? It sank without a trace! A Karnataka Semicon Policy was unveiled with great fanfare last year. The result? No takers!! Read more…
I received a report from IHS iSuppli, which stated that China’s fabless market is likely to double by 2015! Well done, China, and all kudos.
According to the report, there are 3Cs - China, Consumer and Convergence — that China has been focusing on. However, there are three more Cs — Culture, Content and Contribution – that the report urges China to focus on.
The report states: “The companies must accommodate and adjust to the differing cultures of overseas customers. They must learn more about end-content sectors that drive the growth of technology markets. And China’s fabless firms must take advantage of government contributions to the industry, given that Beijing has instituted a range of policies designed to improve the fabless industry in areas including investments, tax rates and capital investments.”
Having taken its own sweet time, the Chinese fabless industry is coming up well, and fast! However, what is the state of the fabless market in India?
If one goes back to Dec. 2009, Pravin Desale, VP and MD India operations, LSI Corp., while speaking at Mentor Graphics’ U2U conference, had said that India has only two (2) fabless firms. If this number, or even a number below double digit is considered to be correct, then India surely has a lot of catching up to do!
Now, who are the leaders in the fabless semiconductor business globally? That’s Qualcomm, Broadcom, even AMD (as per 2010 reports), MediaTek and Marvell. Four of these companies are based in the USA, leaving MediaTek as the only Asian (Taiwan) representative.
Do Indian companies have the necessary experience of designing complete chips from scratch? Perhaps, some may have. Can the Indian companies get the silicon manufactured easily (local manufacturing) and later, debugging it? Here comes the first major gray area! Do the Indian companies have easy access to tools? Perhaps, some, most of them, have that access today!
Now, guess what? The last para — I had written about 7 years ago! ;)
Interesting! I am a bit surprised to read the news item that India is planning to build its own commercial semiconductor fabs, worth Rs. 25,000 crores or $5 billion.
One of the lines in the release by the PIB, Government of India, states that the electronics hardware sector is capital intensive and facing several disabilities and barriers Therefore, the proposal will have significant impact in resolving these issues and help Indian electronics hardware industry to develop localized content/value addition.
Hasn’t this line been repeated time and again? And, what has been the result? Let’s hope that India does not forget the mistakes committed during the initial semicon policy or SIPS.
Coming back to the PIB release, it is stated that the Empowered Committee shall submit its recommendations to the Government by 31.7.2011. Why does the Committee need so much time? Hasn’t pages and pages been written about India’s semicon policy? I wonder whether folks have even looked into all of this properly!
Next, the timing itself! In a post last April, I had mentioned that the Indian semiconductor policy, which was announced back in 2007, had supposedly expired on March 31, 2010! What have the so-called industry caretakers been doing up until now? One does not plan to release a revised policy more than a year post its expiry! It should be immediate!!
It was also proposed to extend the deadline of India’s semicon policy up to March 2015! Whatever happened to that?
Where will the proposed semiconductor fab or fabs be set up? At FabCity in Hyderabad? I don’t think so!
One good thing to come out of all this — there is still some hope for having a fab in India. I am using the word ‘hope’ as there are many, including myself, who feel that all of this is perhaps, a wee bit late call!
As of now, India could possibly look globally for any fab or fabs to buy out! It simply does not have the time to build one! By the time this Committee comes out with its responses by end July 2011, it will be too late. Here’s why!
Let’s say that some folks could actually invest money to build a fab. This will be followed by trying to find a land, and then, possible investors. By the time all of this happens, it will be a good 12-18 months, or possibly, 2013. Next, what’s going to be the nature of the fab that India builds? Is it 200nm, or 300nm, or 28nm? How much would a state-of-the-art fab actually cost? Has any study been done of where the global industry would be by the time a semicon fab start in India?
These, and many more such questions need to answered.
Anyone, who has the slightest interest in the Indian semicon industry, will agree with my statement. As of now, there are multiple challenges facing the Indian semicon industry. That’s where the India Semiconductor Association’s (ISA) Vision Summit comes into play! It assumes much larger importance!
Right now, there are no fabs or foundries in India. There aren’t even too many fabless companies. Okay, let’s face it! There aren’t even that many locally bred LCD or OLED or PDP players. Are there?
Let’s refresh your memory once again! Back in September 2007, the Department of Information Technology, Ministry of Communication and IT, Government of India, came up with the Special Incentive Package Scheme (SIPS) to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!
The “ecosystem units” were defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.
What has since happened? There has been a spiralling growth of solar PV firms — that too, largely owing to the Indian government’s Jawaharlal Nehru National Solar Mission (JN-NSM)! Now, that’s not semiconductors!! I know there will be some disagreements with several folks, and so be it!!!
Recently, the ISA organized a one-day workshop on the Karnataka Semicon Policy. There was a presentation, which proposed the following features for 2010-11:
* Semiconductor focused school and research lab in IIITB: Rs 650.00 lakhs.
* Augmenting orchid tech space in STPI to characterization lab: Rs 200.00 lakhs.
* Implementation of agreement with MATIMOP, Israel (Fund for Semiconductor Excellence): Rs 100.00 lakhs.
* Various subsidies/incentives/concessions under industrial policy 2009-19: Rs 50.00 lakhs.
Perhaps, Israel will help out India for the time being. However, the Indian industry needs to closely look at itself and start to stand up and be counted!