What is the Progress of Semiconductor Ecosystem in India in Last 2 years?

India is taking significant strides towards establishing a robust semiconductor ecosystem, propelling itself into the global semiconductor arena. Recent developments, such as major investments by technology giants like Micron Technology and Advanced Micro Devices (AMD), coupled with the government’s proactive initiatives, underscore India’s growing role in the semiconductor industry. This blog post delves into the latest developments, initiatives, and the potential impact of India’s progress in fostering a semiconductor ecosystem in last 2 years?

In earlier times, industries were ready to do their work but the government was like a ”Not Gate”. When any input flows into the ”Not Gate”, it gets negated. So many needless compliances and no ‘ease of doing business.’ But, we understand that the government must be like the ”And Gate”. While the industry works hard, the government must work even harder.

~Narendra Modi, PM, India at Semicon India, 2022

Policy Changes

In a positive development for the semiconductor ecosystem, the Union Cabinet approved amendments to the “Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India” on Wednesday. A notable shift in the incentives scheme is that the government will now extend a 50 percent incentive for semiconductor fabs across various technology nodes, in contrast to earlier, where different incentives were provided for specific technology nodes. Given the specialized nature of compound semiconductors and advanced packaging, the revised program will also offer substantial fiscal support of 50 percent of the Capital Expenditure in a pari-passu mode for the establishment of compound semiconductors, silicon photonics, sensors, discrete semiconductors fabs, as well as Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) facilities.

Read more: India’s Semiconductor Future Brightens: $1.1B Invested, 10 Major Milestones Reached in 1 Year

ATMP (Assembly, Testing, Marking, and Packaging) fabs for India semiconductor Ecosystem

ATMP fabs take wafers of semiconductor chips and convert them into finished products that can be used in electronic devices. This process entails several intricate steps. First, the wafers are cut into individual chips. Next, they are attached to circuit boards. Finally, the chips undergo testing to verify their functionality.

1. Micron – 2.75B $

TATA Projects has been awarded the contract to construct Micron Technology’s state-of-the-art semiconductor assembly and testing facility in Sanand, Gujarat. The company is dedicated to sustainability. They plan to follow the Green Building Council’s LEED Gold Standards for the Sanand Factory. They aim to integrate advanced water-saving technologies to enable a Zero Liquid Discharge system.

Micron Technology’s ATMP (Assembly, Test, and Packaging) plant in Sanand will span 1.4 million square feet. Operations will unfold in two phases. The first phase aims to start packaged chip production by December 2024. The second phase is set for the latter half of the decade.

2. Sahasra Semiconductors- 100 Cr

Sahasra Semiconductor, based in Rajasthan, is part of India’s Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). The company plans to begin commercial production of Indian-made memory chips at its Bhiwadi plant. Varun Manwani, CEO of Sahasra Semiconductor, announced this and it was reported by the Financial Express. Their strategy involves packaging basic memory products like MicroSD cards and chip-on-board initially. Production is expected to start in September or early October 2023. Sahasra benefits from a 25 percent financial incentive on capital expenditure as part of the SPECS program. As an outsourced semiconductor assembly and test (OSAT) company, Sahasra specializes in assembling and packaging chips for various brands.

3. Tata ATMP plant- 200 Cr

Tata Semiconductor Assembly and Test Private Limited will invest Rs 200 crore in Kolar, Karnataka. The investment is for setting up an ATMP unit. This move aligns with the global trend of enhancing semiconductor production to meet the increasing demand for electronic devices.

TATA’s ATMP investment not only holds promise for technological advancements but also, importantly, for job creation in the region. Additionally, it is expected to generate approximately 155 job opportunities.

4. HCL – 300M$

As per a recent Economic Times report on July 19, the HCL Group is contemplating entering India’s growing semiconductor industry. The report indicates that the group is likely to propose establishing an ATMP facility to the Ministry of Electronics and Information Technology (MeitY). The proposed facility would cover assembly, testing, marking, and packaging of semiconductors.

Sources reveal that the initial investment for this facility is estimated to be in the range of $200-300 million. HCL Group is expanding into the semiconductor sector, differentiating itself from HCLTech, the group’s $12.6 billion IT exports hub. The company plans to apply for standard operating procedures (SOPs) under the semiconductor Production-Linked Incentive (PLI) scheme. This scheme amounts to Rs 76,000 Crore and was introduced in December 2021.

Design/R&D Announcements for India semiconductor Ecosystem

India has been a big design hub for decades but has not been very successful at making products. The Current intiative aims to bridge the gap. The notable investments in design are:

1. AMD- 400M$

Mark Papermaster, Chief Technology Officer of AMD, has disclosed plans to invest up to US$400 million in India over the next five years. AMD aims to establish its largest design facility in Bengaluru, expanding its presence to 10 locations across the country.

Presently, AMD already has a workforce exceeding 6,500 employees in India. The new campus is anticipated to generate approximately 3,000 additional engineering roles by the conclusion of 2028. AMD, renowned globally for its leading semiconductor chip designs, is a significant competitor to Intel. It’s noteworthy that although AMD doesn’t engage in chip manufacturing itself, it outsources this process to contract manufacturers, including TSMC.

2. LAM Research- 236 Cr

LAM Research, a leading US-based semiconductor equipment and services provider, is poised to invest in Karnataka, India. With a legacy dating back to 2000, the company has been an integral part of Karnataka’s technological landscape. In a recent development, Karnataka’s Minister of Large and Medium Industries and Infrastructure, M.B. Patil, unveiled the news of LAM Research’s plans to establish a cutting-edge semiconductor lab in the state. This move underscores the company’s commitment to advancing semiconductor technology and fostering a collaborative ecosystem.

3. Applied Materials- 400 M$

Applied Materials, a leading semiconductor equipment manufacturer, has revealed its plan to invest USD 400 million in constructing a collaborative engineering center in Bengaluru within the next four years, as announced by the company. The primary focus of this center will be the development and advancement of technologies related to semiconductor manufacturing equipment. In their statement, the company specified, “Applied intends to commit a total investment of USD 400 million over a span of four years to establish this new center in India.” This significant investment from Applied Materials closely follows the recent announcement by Micron, a computer storage chip manufacturer, regarding the establishment of a semiconductor assembly and test unit in Gujarat, investing a total of USD 2.75 billion.

GPU Cluster For India semiconductor Ecosystem

Union Minister Rajeev Chandrasekhar conveyed to industry stakeholders on September 22 that the government is strategizing the establishment of a Graphics Processing Unit (GPU) cluster as a part of the India AI program. This initiative aims to bolster startups dedicated to training artificial intelligence models within India. The government’s objective is to offer support to both domestic startups and foreign enterprises keen on nurturing indigenous intellectual property associated with chip design for AI applications. The government will facilitate the assistance through the INR 11-12 billion (equivalent to approximately US$132.61 million-US$144.67 million) design-linked incentive scheme.

Simmtech(& 4 others) To Manufacture Substrates for micron

Ashwini Vaishnaw, Minister for Telecom, IT, and Railways, revealed in an interview with Mint that Simmtech, the primary supplier for US chipmaker Micron Technology, specializing in substrates, has received approval to set up a facility near Micron’s plant in Sanand, Gujarat.

Although the minister did not disclose the exact investment amount Simmtech will allocate for the manufacturing plant, he confirmed that this is the initial step in a series of collaborations with supply partners that Micron Technology plans to bring to India in the forthcoming months and years. These efforts are in line with Micron’s strategy to establish its first assembly, testing, marking, and packaging (ATMP) unit in Gujarat, India.

Semiconductor Lab(SCL) looking for a Joint Venture

The Government of India (GoI) is seeking expressions of interest from commercial or technology entities possessing the required technological and operational proficiency to modernize SCL. The modernization effort will follow one or a combination of two overarching approaches:

Modernization Approach 1: Conversion of SCL into a Research and Development (R&D)-driven Center of Excellence, emphasizing semiconductor R&D capabilities spanning advanced nodes, advanced packaging, compound semiconductors, design and Electronic Design Automation (EDA) tools, materials, and other related research areas.

Modernization Approach 2: Conversion of SCL into a manufacturing entity capable of large-scale production of semiconductor devices/chips.

Jobs & Skill Enhancements for India semiconductor Ecosystem

1. India needs 12 lac Skilled professionals

To meet future requirements, the semiconductor chip design sector will need an additional 2,75,000 skilled professionals, while semiconductor fabrication and ATMP facilities will require 25,000 and 29,000 manpower, respectively. The scope of talent needed spans across disciplines like VLSI Design and Technology, Material Science, Applied Physics, Chemical Science, Process, and Industrial Engineering, emphasizing the diverse skill sets that will be in high demand.

2. Chip to Startup Scheme

One of the ambitious initiatives undertaken by the government is the Semicon India Future Skills/Chip to Startup (C2S) program. This program aims to create a remarkable 85,000 highly qualified global talents within a span of 5 years. By fostering entrepreneurship and innovation, this program not only addresses talent demands but also catalyzes the growth of startups and enterprises in the semiconductor sector.

3. AICTE to offer a Bachelor Course in VLSI

The All India Council for Technical Education (AICTE) has actively formulated curricula for undergraduate, diploma, and minor degrees in the semiconductor domain. By aligning education with the industry’s requirements, the AICTE aims to equip aspiring professionals with the right skills and knowledge, thus bridging the gap between academic learning and practical application.

4. IISc & LAM Research to train Faculties in VLSI

In a monumental stride towards bolstering India’s semiconductor industry, Lam Research and the Centre for Nano Science and Engineering (CeNSE) at the Indian Institute of Science (IISc) have joined forces to introduce an innovative course in semiconductor fabrication technology.

Lam Research made a commitment during Prime Minister Narendra Modi’s visit to the United States to train 60,000 students and professionals in India, directly resulting in this collaborative initiative to contribute to the Indian Semiconductor Mission.

This visionary project aims to establish India as a key player in the global semiconductor landscape.

India & Japan to focus on Semiconductors

On July 20, Union Minister Ashwini Vaishnaw made an official announcement regarding India and Japan’s formal agreement to create a collaborative mechanism, aiming to promote cooperation between their governments and industries within the semiconductor domain. The Memorandum of Understanding (MoU) between the two countries encompasses five significant areas of collaboration: semiconductor design, manufacturing, equipment research, talent development, and enhancing the resilience of the semiconductor supply chain.

In accordance with this agreement, both nations will establish a dedicated implementation organization to facilitate collaboration between their government agencies and industries. This organization will actively work towards fostering partnerships at both government-to-government and industry-to-industry levels, promoting innovation and the exchange of technology to strengthen the semiconductor sector in both countries. Additionally, the implementation organization will address any concerns or inquiries from Japanese stakeholders regarding the India Semiconductor Ecosystem.

Everyone here understands the difference between conductors and insulators. Conductors allow free flow of electrons, whereas insulators resist it. I want to tell you that India is going to be a great conductor for the semiconductor industry. We are ticking all the right boxes. Ye jo samay hai, yahi Sahi Samay hai.

~Narendra Modi, PM, India at Semicon India, 2023

Conclusion

In conclusion, the recent developments in India’s semiconductor industry underscore a significant leap towards fostering a robust semiconductor ecosystem. The nation is witnessing strategic investments, collaborations, and initiatives aimed at positioning India as a key player in the global semiconductor landscape. Initiatives such as the establishment of semiconductor assembly and testing facilities, support for indigenous chip design, substantial investments from major companies like Micron Technology and Advanced Micro Devices (AMD), and collaborative efforts with countries like Japan are pivotal steps.

What is the Progress of Semiconductor Ecosystem in India in Last 2 years?

Policy Changes