Narendra Modi meets Qualcomm CEO, can India make semiconductors?

RITU JHA

When the leaders of the US, Australia, Japan, and India meet on September 24, emerging technologies would be a key area of discussion along with the Indo-Pacific strategic issues.

The most crucial of all such tech is easily the semiconductor fabrication technology.

According to the draft of a joint statement obtained by Nikkei Asia, “The four nations are expected to confirm that ‘resilient, diverse, and secure technology supply chains for hardware, software, and services’ are vital to their shared national interests.”

It added: “The leaders will agree to work toward creating a safe supply chain for semiconductors, one of the keys to the imminent fourth industrial revolution.”

Semiconductors underlie almost every aspect of a modern economy, Stanford University emeritus professor Arogyaswami Paulraj explained to indica News.

Professor Paulraj is the inventor of MIMO (Multiple Input Multiple Output), the core technology in all modern wireless systems including 5G, 4G and WiFi.

Semiconductors are key to everything from hi-Tech manufacturing like commercial jets and advanced instrumentation, med-tech manufacturing like auto and machine tools, and services like IT, e-commerce, fintech, and even low-tech sectors like agriculture, retail and real estate, he said.

“Semiconductor fabrication is a crucial technology, and the US is very worried since our technology is now two generations behind the leaders in this area and also our share of global market is well below 10 percent,” Paulraj said.

TSMC, Taiwan has the top technology with about 53 percent market share, Samsung with best technology for memory chips has about 17 percent share, and Chinese Fabs, also at a lower technology level like the US, have around 8 percent market share,” he said.

Given the growing market for high-end semiconductors with the advent of 5G and AI, the race for technology leadership is no surprise.

Global R&D investments in fabs is expected to be $3 trillion over the next 10 years. The leaders like TSMC and Samsung have each announced $250 billion in investments over the next decade. China invested over $100 billion in the past decade and is expected to invest another $1.4 trillion in the coming decade.

The US government is expected to invest about $50 billion to shore up declining semiconductor fab technology in the country.

With rising tensions between the US and China in technology, Beijing’s soaring ambition in semiconductors is attracting interest. With respect to the Quad partnership in semiconductors, only the US has some capability in this technology, Japan has negligible market share and Australia and India have none. Not surprisingly this is going to be a challenging endeavor.

In a column headline ‘A Glimpse of the Future’ for the Synergia Foundation, Bangalore, India, Paulraj pointed out India’s absence in the semiconductor industry, forcing the country to import almost every semiconductor chip used in civilian and military applications.

India, he pointed out, had begun work in semiconductor fabrication well before China, setting up the Semiconductor Corporation Ltd (SCL) in 1983.

The SCL showed early promise but struggled to compete with the global industry. In 2006, it ceased commercial operations and was renamed Semi-Conductor Lab and absorbed by India’s space program.

While India has the need and the potential to become a major player in the global semiconductor industry, many attempts over the past several decades in the area have been unsuccessful, Paulraj pointed out.

Among the US CEOs Indian Prime Minister Narendra Modi met with on September 23 was Qualcomm’s Cristiano Amon.

After the meeting with Modi, Amon told the media that they don’t manufacture semiconductors in India but it could be an important destination if the infrastructure was available.

AGK Karunakaran, president and CEO at MulticoreWare, president at TiE Silicon Valley, told indica News that there are no state of the art semiconductor fabs (foundries) in India.

This, he pointed out, was despite semiconductor IP and chip design companies like his previous company — GDA Technologies, acquired by L&T in 2007 — doing a lot of chip design and development.

“We were pioneers in semiconductor IP and chip design services starting operations in India in 1997,” Karunakaran said. “Over the last 25 five years, there have been a lot of startups in chip design, IP development and and fabless semiconductors. Today almost every semiconductor company has a design and development operations in India.

But the manufacturing of wafers, packaging, and testing infrastructure does not exist,” he added.

So, there are not enough major investments or success stories yet in the semiconductor manufacturing space,” he said.

Large companies like Qualcomm, Broadcom, Xilinx, Marvell and others — broadly called fabless semiconductor companies — depend on foundries companies like TSMC (Taiwan Semiconductor Corp), Global Foundries and others for manufacturing their chips.

Asked if there’s a possibility of manufacturing chips in India, Karunakaran said the government should approach and invite semiconductor foundry companies to manufacture in India, given the investment it takes.

Manufacturing is not that easy, it requires a significant amount of investment,” he said.

If the semiconductor manufacturing infrastructure is established by inviting global semiconductor manufacturing companies into India, then large global and India-based fabless startup companies will start and flourish to satisfy the growing demands for electronics products in India.”

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