India’s semiconductor dream: Burnt with SCL (1984-2006)

As India's design prowess gained global recognition, obstacles such as the SCL's fire accident underscored the complexities of semiconductor manufacturing.


India’s tryst with the semiconductor industry is a tale of ambition, setbacks, and tenacity. This blog post delves into the riveting journey of the Semiconductor Complex Limited (SCL), an institution that embodied India’s aspirations in the realm of chip manufacturing. From missed opportunities to devastating setbacks and strategic partnerships, we unravel the complex narrative of SCL and its lasting impact on India’s semiconductor landscape.

India’s semiconductor dream: No to foreign investment (1950-1984)

SCL’s Promising Beginnings and Foreign Collaborations

Founded against the backdrop of India’s quest for technological self-reliance, SCL embarked on its journey by obtaining the license for the 5-micron process technology from American Microsystems Inc. (AMI). This marked a significant stride towards indigenous semiconductor manufacturing capabilities, setting the stage for SCL to emerge as a key player in the global semiconductor arena.

Amidst high hopes, SCL forged crucial partnerships – a landmark deal with the American Industrial Automation company, Rockwell, to manufacture the 2560G microprocessor. Concurrently, a collaboration with Japan’s technological powerhouse, Hitachi, not only bolstered SCL’s prowess but also extended to third-party assembly services and the assembly of the Acorn BBC computer project.

The Edge of Opportunity and Unforeseen Setbacks

As global semiconductor technology raced forward, SCL stood on the precipice of technological excellence, positioned just a step away from achieving the leading-edge technology node that giants like Intel and Toshiba attained in 1987. The possibilities for SCL to spearhead the semiconductor industry were tantalizingly close, with abundant opportunities beckoning.

However, fate dealt a harsh blow. In 1989, a devastating fire engulfed SCL’s fab facility, shattering operations and derailing India’s semiconductor ambitions. The origins of the fire remained shrouded in uncertainty, sparking suspicions of arson. This tragic event underscored the vulnerability of semiconductor manufacturing facilities to operational hazards and underscored the need for resilience.

It is possible that SCL could have become the TSMC of India if there was no fire in 1989.

First, SCL was a state-of-the-art semiconductor fabrication plant (fab) at the time of the fire. It was one of the few fabs in the world that could produce 64K DRAM chips, and it was also one of the most efficient fabs in the world.

Second, SCL had a team of talented engineers and scientists who were capable of designing and manufacturing semiconductors. These engineers and scientists had received training from some of the best universities in the world, and they were eager to make a contribution to India’s semiconductor industry.

Third, SCL had the support of the Indian government. The government was committed to developing India’s semiconductor industry, and it was willing to provide SCL with the financial and technical support it needed to succeed.

The fire in 1989 destroyed SCL’s fab and set back the company’s progress by several years. However, SCL was able to rebuild its fab and resume production.

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Struggles, Revival Attempts, and Transformation

The aftermath of the fire plunged SCL into a period of turmoil. In 1997, a government injection of $50 million aimed to resurrect SCL. Yet, despite these efforts, the institution grappled with retaining elite talent and overcoming execution challenges. As SCL faltered in fulfilling government proposals, discussions about divesting the fab facility gained momentum. However, the lack of a suitable buyer culminated in an impasse.

By 2005, a transformation was imperative. SCL transitioned into an R&D center under the aegis of the Department of Space, undergoing a rebranding as the “Semiconductor Laboratory.” While this evolution sought to harness SCL’s accumulated expertise, outdated offerings coupled with a reliance on government projects presented hurdles in achieving financial viability.

Nearly 8 years later, Govt again infused $ 50 million as a fund to revive SCL.  By this time, much of its elite talent settled abroad or was chosen for high-paid jobs. Due to this SCL failed to fulfill govt proposals one after the other. Finally, govt decided to put the SCL fab out for Sale. Since there was no potential buyer, the deal didn’t go through. Govt decided to keep the fab for making Chips for telephone exchanges & to make Chips for smart cards . Even this didn’t go well.

Navigating Shifting Landscapes and Industry Conditions

The mid-2000s ushered in fresh prospects with India’s announcement of a $3 billion fab-city project for semiconductor manufacturing. Among those showing interest was AMD, which contemplated establishing assembly and test facilities. However, industry dynamics dictated AMD’s withdrawal, underscoring the intricate interplay between semiconductor manufacturing and global market variables.

Finally, Company was restructured as an R&D Centre under the Dept. of Space . SCL was renamed to mean “Semiconductor Laboratory”. By this time, SCL’s offerings were outdated and much of its revenue used to come only from handling Govt projects. But the company could not make an attractive profit.
* 1999-2000 :: $14m revenue – $4,00,000 profit
* 2004-2005 :: $5.6m loss
* 2005-2006 :: $3.5m revenue – $2m loss

SCL’s Strategic Leap: TowerJazz’s Transfer of Technology

2006- In a decisive move, SCL entered into a Transfer of Technology (ToT) partnership with TowerJazz, an Israel-based semiconductor foundry. This strategic collaboration brought cutting-edge process technology to SCL’s doorstep. The ToT allowed SCL to leapfrog ahead, leveraging TowerJazz’s expertise and technological prowess to revamp its offerings. The knowledge transfer empowered SCL to enhance its semiconductor capabilities, aligning with global industry standards and invigorating India’s semiconductor ambitions.

A Parallel Path to Design Excellence

While SCL navigated its own trajectory, the realm of semiconductor design in India began taking shape independently. Prabhakar Goel, a distinguished alumnus of IIT-Kanpur who had found success in chip design in the US, pioneered this movement. His startup, Gateway Design Automation (GDA), made waves with its testing tool, Verilog, essential for chip development. Drawing revenue in millions, GDA’s clientele comprised top Japanese and Taiwanese chip makers.

Recognizing the labor-intensive nature of certain Verilog-related tasks, Goel hatched a visionary plan. In 1985, he assembled a team of engineers and established an Indian unit at Noida’s export processing zone. This strategic move marked the inception of India’s semiconductor design foray. In 1989, Cadence Design Systems from Silicon Valley acquired GDA, cementing India’s position on the global chip design map.

In another decade or so, 17 out of 25 top semiconductor design firms, including Intel, had opened centres in India, making the country a formidable force in chip designing.

A Rising Force in Semiconductor Design

Goel’s trailblazing efforts paved the way for more US semiconductor design giants to establish their presence in India. Texas Instruments and STMicroelectronics set up offices in the late 1980s, fueling India’s ascent in the chip design hierarchy. This expansion culminated in a transformative decade when 17 out of the top 25 semiconductor design firms, including industry stalwart Intel, established centers in India.

As the demand for semiconductor design soared, Indian talent garnered recognition and trust from US and European companies. Collaborative efforts saw design expertise leveraged in India, while mass production facilities in Taiwan complemented the ecosystem.

To meet the growing demand, US and European semiconductor companies took advantage of the Indian design talent, and used facilities in Taiwan for mass production


Factors contributing to India’s semiconductor challenges included suboptimal investments, limited domestic demand, and evolving global business dynamics. The rapid pace of technological change further accentuated the uphill battle.

Navigating the Future India’s journey in the semiconductor landscape is a tapestry woven with diverse threads of independent design triumphs and manufacturing challenges. The early strides made by pioneers like Prabhakar Goel and the subsequent recognition of Indian design talent signify a significant contribution to the global chip design arena.

Part 3- India’s semiconductor dream: Failed proposals & outdated SCL(2006-2022)

Editorial Team
Editorial Team
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