India Will Have Two Semiconductor Wafer Fabs By 2030 However Wants To Put Equal Focus On Semiconductor Product Corporations

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‘Chip Pe Charcha,’ an initiative by the VLSI Society of India, goals to unite international leaders in semiconductor and VLSI design. Dr Satya Gupta, President of VSI, engaged in a thought-provoking dialogue with Chris Miller, the acclaimed writer of the 2022 bestseller ‘Chip Conflict.’ This insightful alternate guarantees beneficial views on chips and semiconductors. Don’t miss it.

SG: How has the semiconductor business modified since your guide got here out two years in the past?

CM: The semiconductor business has undergone vital adjustments. First, the surge in synthetic intelligence has intensified the demand for AI-related chips, and firms are leveraging AI to boost design and manufacturing processes. Second, geopolitical tensions, notably between the US, China, and Taiwan, have fragmented the business, leading to distinct markets centered on China and the remainder of the world. Third, quite a few governments, together with these of the US, Europe, Japan, India, and South Korea, are closely investing in native semiconductor manufacturing, resulting in substantial international funding on this sector.

SG: With quite a few new bulletins for fabs and ATMP factories worldwide, will provide quickly outpace demand?

CM: This will depend on the kind of merchandise. For GPUs, there shall be a continued extreme scarcity because of excessive demand from AI purposes and the restricted availability of revolutionary fabs. Semiconductors for electrical autos are additionally in excessive demand because the business transitions from combustion engines. Nonetheless, an oversupply of extra widespread logic semiconductors and utility chips might happen with the inflow of latest factories. Moreover, political elements are inflicting market fragmentation, with governments imposing restrictions and tariffs on chips from rival international locations, affecting provide chains and creating each alternatives and inefficiencies.

SG: Many fab tasks, together with these in Ohio and Arizona, are delayed. What are the explanations, and the way would possibly this have an effect on investments?

CM: There are two major causes for the delays. First, the patron electronics market, together with PCs and smartphones, has been gradual for the previous 12 months and a half, main companies to postpone wafer fab tasks. Second, there’s a scarcity of expert staff wanted for brand new fab development and operation, notably within the US, the place the variety of new fabs has elevated considerably. This scarcity of specialized staff and the necessity for extra coaching are inflicting additional delays.

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SG: Relating to China, with quite a few US sanctions on superior semiconductor manufacturing expertise and gear, can China develop indigenous capabilities to supply sub-3-nanometre chips by 2030?

CM: Catching up within the chip business is difficult because of its fast development. TSMC at the moment leads in superior fab manufacturing, whereas ASML is forward in superior lithography. By 2030, China would possibly develop applied sciences just like EUV for producing 3nm and 2nm chips, however their effectiveness when it comes to yield and high quality stays unsure. In the meantime, TSMC and ASML are prone to advance additional, making it more and more troublesome for China to catch up.

SG: Can China develop 2nm chips utilizing their very own gear and expertise by 2030?

CM: It’s believable that China might develop their very own 2nm expertise and manufacturing gear by 2030. SMIC has been roughly 5 years behind TSMC. If TSMC begins producing 2nm chips in 2025, SMIC would possibly attain 2nm by 2030, offered they preserve their present tempo. Nonetheless, growing new instruments and processes shall be essential, and different areas might advance additional technologically by then.

SG: If China have been to develop a aggressive cellular app processor and determined to not use, as an example, Qualcomm chips of their smartphones, what could be the implications?

CM: If China have been to design, manufacture, and scale up manufacturing of smartphone processors with cutting-edge capabilities, they would want to keep away from outdated expertise. At present, it’s unlikely that China has the capability to fulfill such calls for with their present expertise.

SG: What would the impression be if this state of affairs occurred?

CM: Such a state of affairs could be vital. Chipmakers who primarily promote to Chinese language manufacturers could be notably involved. Consequently, there’s a shift in direction of transferring manufacturing outdoors of China. For instance, Apple plans to assemble 1 / 4 of its smartphones in India beginning subsequent 12 months. Non-Chinese language chip design corporations are additionally fascinated with increasing their presence outdoors of China. India, with its giant smartphone market, gives alternatives for American, Taiwanese, and Japanese corporations to collaborate with Indian corporations, thus lowering the market energy of Chinese language corporations.

SG: Contemplating that roughly 76% of Indian smartphones are Chinese language manufacturers, what impression would it not have on US semiconductor corporations if Indian producers selected MediaTek processors over Qualcomm because of commerce tensions?

CM: This can be a vital concern. US semiconductor corporations like Qualcomm and Broadcom are aware of those dangers. They’re working diligently to keep up robust relationships with Chinese language corporations and the federal government whereas additionally searching for to diversify their provide chains away from China to mitigate potential dangers.

SG: Contemplating the present geopolitical scenario, might India perform as a strategic benefit for US semiconductor corporations? For example, if an organization like Qualcomm collaborates with Indian corporations to create an Indian model of cell phones utilizing their processors, doubtlessly capturing 10%-20% of the market share from Chinese language manufacturers, what’s the feasibility of such a collaboration?

CM: This state of affairs is more and more possible because of rising geopolitical pressures and investments within the electronics ecosystem. US corporations have a powerful incentive to assist the event of other merchandise and types in India. There isn’t any cause an Indian-based smartphone firm couldn’t produce a world-class product, sourcing parts from the US, Taiwan, Japan, and India, and compete successfully towards Chinese language manufacturers. This chance extends past smartphones to different merchandise the place Chinese language manufacturers are additionally weak, making it believable to construct aggressive Indian merchandise with the help of US semiconductor corporations.

SG: China is closely investing in compound semiconductors like GaN and silicon carbide, that are beneficial for EVs and different energy electronics purposes. On condition that compound semiconductors don’t require superior manufacturing expertise, can China dominate this sector?

CM: Chinese language corporations and the Chinese language authorities view compound semiconductors as a big aggressive benefit, with substantial funding pushed by the rising EV market. China is prone to see elevated protectionism and tariffs, which might present assured markets for Chinese language corporations, even when their high quality doesn’t match that of European and Japanese counterparts.

SG: China is specializing in lower-end chips like microcontrollers and Wi-Fi, producing them at decrease prices utilizing older expertise. May this result in the US and others concentrating on high-end chips whereas China dominates the low-end market?

CM: With out intervention from policymakers within the US and different international locations, China might certainly dominate the lower-end chip market. US, Japanese, and European leaders are involved about China’s subsidies impacting Western corporations’ income and should impose extra tariffs and restrictions to restrict the presence of Chinese language chips in international markets. This might end in advanced geopolitical and regulatory battles.

SG: Corporations akin to Google, Amazon, and Microsoft are growing their very own customized chips. May this result in a transformative shift within the business just like the fabless mannequin of the Nineteen Eighties?

CM: The important thing challenges for customized chips are value and complexity. At present, solely main tech corporations with substantial assets can afford to develop them. To make customized chips extra accessible to different industries, akin to automotive and medical, we’d like cheaper, less complicated design processes. AI-driven design software program might assist cut back prices and simplify improvement. Moreover, chiplet-based architectures, which contain assembling pre-designed parts, could possibly be a neater preliminary step for non-tech corporations. Nonetheless, additional simplification and higher design instruments shall be essential for broader business adoption.

SG: India launched a complete semiconductor coverage across the similar time your guide was launched. How do you assess the progress made up to now two and a half years?

CM: Appreciable progress has been made below the India Semiconductor Mission. Main corporations like Micron have began establishing amenities, and there have been bulletins for OSAT and wafer fabrication amenities from Tata and others. Electronics product meeting in India can be increasing, with Apple planning to assemble 25% of its telephones in India, contributing to the general manufacturing ecosystem. Moreover, India’s power in chip design stays notable, and semiconductor product design ought to proceed to be a key focus.

SG: Some imagine India is just not advancing as shortly as potential. Contemplating India began with minimal semiconductor manufacturing, what are your ideas?

CM: Advancing in chip manufacturing and meeting is a difficult, capital-intensive course of that requires a number of years to finish a single challenge. Given this context, progress has been strong. It’s essential to not rush the method however to develop a complete ecosystem to assist long-term progress.

SG: By 2030, is it lifelike for India to have two semiconductor wafer fabs, two compound semiconductor fabs, and two OSAT crops?

CM: That is very lifelike. It’s sure that India may have at the very least two silicon fabs, though the precise forms of semiconductors, expertise nodes, and capacities will have to be clarified. The institution of two OSAT/ATMP crops and two compound semiconductor fabs can be possible.

SG: You typically point out that giant Capex manufacturing tasks are like ribbon-cutting alternatives and that India ought to concentrate on design. What must be the main target and technique for India to change into a ‘semiconductor product nation’ quite than only a supplier of design companies?

CM: Within the semiconductor business, most monetary positive factors accrue to corporations producing semiconductor merchandise, not merely offering design companies. The problem for India is to create manufacturers and firms headquartered in India that promote globally. This has been achieved within the software program sector, and there’s no cause it can’t be replicated in semiconductors. India’s enterprise capital ecosystem must change into extra {hardware} centered. Expertise exists; it’s about connecting it with enterprise experience and financing, and there are encouraging indicators on this route.

SG: The Indian diaspora has established many profitable semiconductor corporations in Silicon Valley. How can collaboration between Silicon Valley and India be improved to make India a ‘semiconductor product nation’?

CM: Enterprise funding for {hardware} in India wants to extend and prolong over longer durations, just like Silicon Valley. Whereas software program ventures obtain extra VC consideration, {hardware} tasks require assist over a five-year or longer horizon to design and launch merchandise. For each ten software program corporations funded, at the very least one {hardware} firm ought to obtain assist. Indian corporations also can leverage the massive home market to check and refine merchandise earlier than international enlargement. This method has not but been absolutely utilised however gives a promising mannequin for Indian corporations.

SG: India is predicted to leverage its almost $200 billion home electronics market. Nonetheless, round 90% of this market is served by international product corporations that determine on chip sorts outdoors India. How can India develop its electronics product corporations and types to create demand for native chips?

CM: The success of non-US chip design corporations like MediaTek and Huawei illustrates the potential of specializing in electronics system-level merchandise. Huawei grew its chip design via its telecom and smartphone programs enterprise, whereas MediaTek built-in itself into the worldwide smartphone ecosystem. India ought to concentrate on rising electronics merchandise akin to EVs and transportation to create leverage for home chip corporations.

SG: If India goals to create one or two corporations like MediaTek, what must be the technique and focus areas?

CM: MediaTek’s success stemmed from timing its funding in smartphones. For India to duplicate this mannequin, it ought to goal completely different markets akin to EVs and medical gadgets, leveraging its distinctive and huge home market in transportation and healthcare. The appliance of AI to healthcare, wearable monitoring gadgets, and revolutionary medical gear presents vital alternatives for semiconductor innovation.

SG: Lastly, after semiconductors and AI, what could possibly be the subsequent international battleground the place international locations will search supremacy, and would you think about authoring a guide on it?

CM: Though I’ve not began a brand new guide but, I’m fascinated with biotechnology and genetic engineering, notably with the appliance of AI. Main improvements in these areas appear imminent. In 10-15 years, biotechnology and genetics might advance as considerably as chip expertise does immediately.

This interview was transcribed by Nidhi Agarwal, who’s a journalist at EFY. She is an Electronics and Communication Engineer with over 5 years of educational expertise. Her experience lies in working with improvement boards and IoT cloud. She enjoys writing because it permits her to share her data and insights associated to electronics, with like-minded techies.