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What should India do to boost electronics manufacturing?

February 3, 2014 Comments off

The IESA 2014 Vision Summit opened today in Bangalore, with the one key question: what does India need to do to boost electronics manufacturing? Here are some words of wisdom from some industry icons.

SR Patil

SR Patil

SR Patil, Minister for IT-BT, Science and Technology, Karnataka, remarked that at present, we are not able to find any significant place in global hardware arena. We are heavily dependent on other countries to import electronic goods – that may be computers, chips, mobile phones and the list goes on.

“If I am right, our import bill of electronic goods has surpassed $30 billion previous year. It is calculated to be $42 billion by next year if we don’t initiate sincere measures to boost the domestic manufacturing. I don’t have any hesitation to say that we must learn lessons from small countries such as South Korea, Taiwan and Israel on this count.”

The main objective of the Karnataka ESDM policy is to make the state a preferred destination for ESDM investment, and emerge as the ESDM leader in the country.

Patil said: “We aim to generate around 2.4 lakh jobs and 20 percent of the country’s total ESDM export target of $80 billion by the year 2020. We are preparing a ground for setting up of ESDM clusters – both that of Brownfield and Greenfield.”

As many eight ESDM companies have registered with the IT-BT Department recently and obviously they are entitled for various incentives and concessions under the new policy.

Dr. Om Nalamasu, senior VP and CTO, Applied Materials Inc. added that establishing a high-value manufacturing industry as semiconductor chip fabrication will have transformative effect on the overall electronics industry in India.

This will have a very strong multiplier effect that will result in major strides forward in the value generated from all sectors within the semiconductor ecosystem – one of the biggest being the growth of high-tech and high value-add employment opportunities this will generate in the country. The historic significance of this approval will be felt for many years to come. Manufacturing in India will soon witness a new frontier.

A strong manufacturing base is critical for high-growth economies. There are successful examples in South East Asia where advanced manufacturing has resulted in strong GDP multipliers. In India, there’s a strong electronics market opportunity, driven by telecom, IT, consumer and industrial electronics; 65 percent of these electronic products are imported today. The disposable income of the growing middle class in India and China will continue to drive electronics market growth.

The point is: all of these words have been spoken over and over again! The first semicon policy was announced in 2007-08, followed by a revised policy in 2010-11. In between, the first Karnataka semicon policy was announced. However, there have been very, very few, or no takers! Even the first semicon fab policy announcement went unaccounted for! Later, last year, there was another announcement regarding two fabs that are said to be coming up!

When will India deliver? One hopes that happens soon!

What’s this EoI got to do with semiconductor fabs in India?


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…

Where is Indian semiconductor industry headed?


It has been a pretty disappointing year for me, so far, owing to one or another family related problems. I’ve only flattered, to deceive, as one would put it! Not that I’m out of my troubles, but am sure I can ‘play my game as usual’, hopefully, without any further disruptions.

First, I have been closely following the global semiconductor industry, despite my troubles, and there’s really nothing new worth reporting, at least, so far!  Hope the next month and the rest of the year are better! But first, my take on the Indian semiconductor industry, which has now started to disappoint! At least, yours truly!

Last July, I had done a post, where, Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli, (now IHS iSuppli) had said to a question on the need for a foundry for the Indian semiconductor industry that: “If there is a foundry built in India, it will have to start at mature technology, which they will have to underprice just to get business. Financially, this makes no sense for any investor, except for the government, which can protect the foundry (their investment) through tariffs.”

It is going to be a year since the remark was made!

This February, at the ISA Vision Summit, one heard  a well known personality voice concern that the manufacturing sector suffers from a confidence deficit. A part of the software successes have been due to a brand developed. He said: “We have the advantage of a great brand, and need to make use of it in the electronics manufacturing sector. The government recognizes the need to convert Indian into a global destination.”

Where is the recognition to help create Indian into a global destination happening? Does it really take so long to develop a semicon policy in the first place? It is strange that perhaps, six and a half years since it was set up (Oct. 30, 2004), the ISA has still not found any takers for a fab in India!

Elsewhere, I mentioned that the latest ISA-Frost report on the status of the Indian semiconductor industry does not sound accurate! I don’t have anything personal against the Indian arms of MNCs, but why are they made even part of the report? I don’t recall seeing a similar report from China or Japan or Taiwan, that does a similar thing!

Where are the Indian semiconductor companies in the first place? One of India’s major semicon firms, the Srini Rajam-led Ittiam Systems, recorded a growth of Rs. 52 crore in 2010, while another significant ODM player, SFO Technologies from Kochi, Kerala, was said to be achieving Rs. 750-800 crore in 2010. What about the other Indian companies? To be accurate: what’s even happening with the Karnataka Semicon Policy? And, don’t some of the other Indian states deserve similar policies?

There are certain things that the Indian semicon industry needs to do, unless it wants to be written out of reckoning in the global context.
1) Focus on the needs of the Indian semicon companies only!
2) Prepare industry reports that highlight the capabilities of Indian semicon firms only; it does not matter how small those firms are! At least, we will have correct reports presenting the right picture.
3) I mentioned 10 points the Indian semicon industry needs to focus on in a post “Long wait for Indian semicon industry?” Perhaps, some, if not all, need to be paid attention to!

I am also told that the ISA president, Ms Poornima Shenoy is leaving, to start a new business. My best wishes to her for a successful career!

‘Long wait’ for Indian semiconductor industry?


I still don’t quite understand the submission made by the IT Taskforce on recommendations for the Indian hardware and electronics manufacturing! The first proposal was submitted by this Taskforce, back in Nov. 2009! Now, a leading daily comes out with a report about a new prescription to boost electronics manufacturing. What is all this?

By itself, isn’t this a ‘long wait’ for the Indian semiconductor and electronics industries?

I repeat: Have we really done enough, even in  the past, to even boost electronics hardware manufacturing in the country? If yes, then where are the mini Hsinchus and Shenzhens within India? N. Vittal had said something similar (such as developing mini Hong Kongs and Singapores) some years ago, but that seems ages ago, now!

Back in April 2010, I had written a post titled: Did you know that the Indian semicon policy had expired and now requires an extension? The next thing one heard was in July 2010: Indian industry proposes to extend deadline of India’s semicon policy up to March 2015!

What is really happening with the Indian semiconductor industry? First up, the semiconductor indusrty is NOT the IT industry. However, it appears that it is being treated like one!

Did anyone really look into the reason why fabs never happened in round 1 of the SIPS? Perhaps, not! I had asked a question, back in Feb. 2009: The Indian silicon wafer fab story seems dead and buried. Should we revive it?

Lest I be repetitive, and boring, I had suggested a 10-point program for the Karnataka semicon policy — in another blog post — on June 29, 2008. The points were:

1. A long-term semiconductor policy running 20-25 years or so.
2. Core team of top Indian leaders from Indian firms and MNCs, as well as technology institutes in Karnataka to oversee policy implementation.
3. Incentives such as government support, including stake in investments, and tax holidays.
4. Strong infrastructure availability and management.
5. Focus on having solar/PV fabs in the state.
6. Consider having 150/180/200mm fabs that tackle local problems via indigenous applications.
7. Develop companies in the assembly testing, verification and packaging (ATMP) space.
8. Attract companies in fields such as RFID, to address local problems and develop local applications.
9. Pursue companies in PDP, OLED/LED space to set up manufacturing units.
10. Promote and set up more fabless units.

All that one needs to do is to simply extend this all across India, rather than waste time in devising policies that have either expired, or well, take ages to see the light of the day! We should also refrain from discussing wafer fabs for now, and focus on fabless. Although, if we do attract and develop a local fab, that would be great for India!

Wonder, whether anyone in India is even listening!

Quite a few challenges before Indian semicon industry!

February 4, 2011 5 comments

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!

What’s happening with Karnataka semicon policy?

January 31, 2011 2 comments

What’s happening with the Indian semiconductor industry? Rather, what’s happening with the Karnataka semicon policy? I was rather surprised to receive an invite to an event held last Friday at Bangalore’s The Lalit Ashok Hotel.

First, I did not make it to the event! However, one finds that the India Semiconductor Association (ISA) has organized an event, along with the Government of Karnataka, and that too in early 2011!

Excuse me, what is the Government of Karnataka doing in 2011 with a policy, which it is itself responsible for placing late! Okay, even if it is doing something, or well, trying to do something, why not in 2010 itself, especially when the Karnataka semicon policy was announced!

Now, the focus of the policy is:
a) Retain its edge in design by attracting fresh investments and expansion by existing companies within the state.
b) Attract manufacturing related investments by focusing on three key activities.
I. Promote Karnataka as a semiconductor design hub.
II. Attract investments in high-tech semiconductor manufacturing.
III. Promote generation and use of green energy, specifically, solar energy.
IV. Focus on manpower development.

All of this is fine! It is very well known and quite clear to the Indian semiconductor industry as to what’s required to be done in Karnataka.

Unless, the government of Karnataka found out that there have been no takers for the state semicon policy so far!

It seems to be the latter case!

Round-up 2010: Best of semiconductors

December 31, 2010 2 comments

Right then, folks! This is my last post for 2010, on my favorite topic – semiconductors. If 2009 was one of the worst, if not, the worst year ever for semiconductors, 2010 seems to be the best year for this industry, what with the analyst community forecasting that the global semicon industry will surpass the $300 billion mark for the first time in its history!

Well, here’s a look at the good, the bad and the ugly, if available for otherwise what has been an excellent year, which is in its last hours, for semiconductors. Presenting a list of posts on semiconductors that mattered in 2010.

Top semiconductor and EDA trends to watch out for in 2010!

Delivering 10X design improvements: Dr. Walden C. Rhines, Mentor Graphics @ VLSID 2010

Future research directions in EDA: Dr. Prith Banerjee @ VLSID 2010 — This was quite an entertaining presentation!

Global semicon industry on rapid recovery curve: Dr. Wally Rhines

Indian semicon industry: Time for paradigm shift! — When will that shift actually happen?

Qualcomm, AMD head top 25 fabless IC suppliers for 2009; Taiwan firms finish strong!

TSMC leads 2009 foundry rankings; GlobalFoundries top challenger!

ISA Vision Summit 2010: Saankhya Labs, Cosmic Circuits are Indian start-ups to watch at Technovation 2010!

ISA Vision Summit 2010: Karnataka Semicon Policy 2010 unveiled; great opportunity for India to show we mean business! — So far, the Karnataka semicon policy has flattered to deceive! I’m not surprised, though!

Dongbu HiTek comes India calling! Raises hopes for foundry services!!

Indian electronics and semiconductor industries: Time to answer tough questions and find solutions — Reminds me of the popular song from U2 titled — “I still haven’t found what I’m looking for”!

What should the Indian semicon/electronics industry do now? — Seriously, easy to say, difficult to manage (ESDM)! 😉  Read more…

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