Ritu Jha-
SEMICON West 2024 drew a wide variety of tech leaders from around the world, each with their own unique perspectives on the field’s future.
But conference CEO Aji Manocha says everyone should agree on one thing: Semiconductors are of critical importance to every industry in the world, from agriculture, textiles and mobility to automotive and aviation, and they’re foundational for humanity.
“That’s the most important message – it is important to humanity because we depend on semiconductors,” Manocha said.
Manocha agreed to sit down with indica on the sidelines of SEMICON West 2024.
Question: You’ve said that you believe the importance of semiconductors became undeniable during the pandemic. Would you elaborate on that?
Answer: The Covid vaccine was developed within six months. That was possible because of the supercomputing-enabled genome sequencing. If we didn’t have semiconductors for supercomputing, then genome sequencing could not have been completed in a matter of months. Earlier, it used to take years to do genome sequencing. So that’s why we were able to control the COVID within two years. Otherwise in the past when pandemics happened it took years before things became normal. I think semiconductors have now been recognized as the most critical industry for healthcare, manufacturing, agriculture, and automotive. If you look at the electronic EV electric vehicles there are several hundred thousand chips and sensors. Electric vehicles are basically chips on wheels.
Covid taught us how dependent we are on these devices that are operational due to chips and these gadgets kept life going despite all the lockdowns. While the world was figuring out how to deal with this crisis, companies continued employing people, students, and children got their education at home, and we were able to consult our doctors virtually. Life went on and we figured out a new way to live, work, think, and communicate. And the common denominator, all these were semiconductors, because if you didn’t have those devices, nothing could have continued. All these devices have one thing in common, they all have chips inside, those are the semiconductors.
Q: What else has increased the awareness of semiconductors?
A: During the pandemic, there was a freeze on fabrication and manufacturing in Texas. There were two or three companies with fabs, and those fabs were affected. Generally, whenever there is a calamity like a freeze, tsunami or earthquake fabs get affected. When I was the CEO of global foundries, a tsunami hit Japan and that made an impact because some of the materials were in jeopardy as they could not be shipped and that created tension. Recently, the earthquake in Taiwan had a minor impact even though it was far away from where the Taiwan Semiconductor Manufacturing Company is located. The industry is very vulnerable to climate issues.
The Russia-Ukraine war is having an impact because some materials come from Ukraine, like neon gas and palladium and few others. Whenever this impact happens, we go to alternate sources, but not everything has alternate sources. Like a majority of the high-purity chemicals for our industry come from Japan, some from Europe, the US, and a few from other countries. But if there is a calamity in Japan it will shut us down.
Q: What role did the escalation in U.S-China trade tension in 2017 play in making people realize how dependent the U.S. is on other countries?
A: A combination of these geopolitical factors and calamities generated the will to develop our own capabilities. Many other countries also started developing a strategy for semiconductors. The one thing that people probably don’t realize is that though the semiconductor industry is very capital-intensive, it is also the second most profitable industry in the world. People can see how dependent we are and how critical semiconductors are for humanity.
Q: How is the AI explosion impacting the semiconductor field?
A: At least half of the semiconductor industry’s growth is enabled by AI and 50% of the new fabs will be more focused on AI-enabled chips. SEMI has also reported that 104 fabs have been announced including one in India to come on board with now and 2027. AI will boost the industry and Quantum will be the next wave that will take the industry beyond $1 trillion. As the head of SEMI, I’m getting calls from so many countries, virtually one call a week from companies people have not heard of in terms of semiconductor ambition. They all want to explore what kind of semiconductor industry we want to have in our country. It makes sense because it is critical for humanity, and economic prosperity. That is why it is becoming a national agenda for many countries. No matter how politicians think, as human beings, they all need semiconductors. Every politician needs a smartphone.
Q: What are your thoughts on the evolution of the semiconductor industry in India?
A: It is just the beginning in India, a lot has to happen and many entities have to play a role. The vision of Prime Minister Modi is robust to making India a semiconductor nation. It is a good vision, for India, for the world, and the industry. If the industry is going to double in size, we don’t think it’s a good idea that only the same hubs become bigger and bigger because then the risk becomes bigger because of the climate and geopolitical issues. It is in the best interest of the people of the world and the industry that we have multiple semiconductor hubs so that if one hub is affected for any reason then the other hubs can take over. If there are multiple hubs, it makes us more comfortable and it helps with the supply chain resiliency.
Q: Why would India make for a good global semiconductor manufacturing hub?
A: There are several compelling reasons why India should be the hub. It is a big market with 1.4 billion people, larger than any other country in the world. The language is not a problem in India, we speak the international language, English everywhere. It respects the international laws for IP and national security. Multilateral companies and like-minded countries that respect international laws are critical because there are a lot of Intellectual Properties involved in the semiconductors. I think India has the right ingredients and it produces hundreds of thousands of graduate, and undergraduate students in the science and engineering fields. There’s a big shortage of people all over. But there’s a lot of raw talent in India and we can tap into the raw talent, train them, educate them in such a way that they can not only help India, but also help the industry wherever it’s needed.
Q: SEMI is doing a lot of work to support India’s evolution into a semiconductor hub. As you know, the inaugural session of SEMICON India will be held in Greater Noida from September 11 to 13. How is that planning going so far?
A: The core competency of SEMI is to enable the ecosystem. SEMI was involved in the making of ecosystems in South Korea, Taiwan, China, and many other countries. SEMICON West was packed with events, and full of people, we registered a record attendance, and the keynote stages were packed. For SEMICON India we have 1000 or 1100 booths and already we have the commitment from all over the world for 450 booths. Normally we never had that many booths for the inaugural conference semiconductor and our expectation was for 100-150 booths. But we already have got three to four times more and that’s a good sign because people see the value of going to India and the potential there.
Q: What should the Indian government be doing to facilitate this development?
A: They should make it more acceptable for the countries which depend on various cultural issues. For example, Tata has a Taiwanese partner. There will be a lot of Taiwanese people coming to Gujarat and other parts of India. How do we make sure that they feel at home? We met with some of the officials from Gujarat in Taiwan in May. And, one suggestion was to create a Taiwan village in Dholera. I think India needs to do this kind of thinking because there will be a lot of international people coming for semiconductors. How do we make them feel welcome? And they also feel that there is some cultural acceptance for them.
Q: Why didn’t Indian companies participate in SEMICON West?
A: India didn’t have the ecosystem yet. We have to first make the ecosystem in India. What we have is a big design center. The design capacity is there but we don’t have the equipment makers. The equipment companies there are involved in software activities or service activities but they’re not manufacturing. India is very good in the chemical industry but not the semiconductor-grade chemical industry. A huge change has to happen.
A policy that the Indian government announced is to enable the ecosystem. Fab should not be the starting point, the ecosystem should be the starting point. India is very lucky to have Micron who is going to be driving the back end and Tata Group driving the front end. These companies will have to play a big role in setting up the ecosystem in India. We also need the suppliers to think bigger, this is not just one front-end fab and one back end fab. There will be more to come. So, they should put their shops there. That’s really what the objective of SEMICONs is, to encourage people to go multiple times and the SEMICON and the local entrepreneurs will speak, or like-minded companies will speak with them, create JVs with them, create their own capacities and set up their shops.
Q: With Japan, Korea, and Taiwan having existing ecosystems, how will India find its place in this competitive semiconductor industry?
A: It is going to be a long, competitive journey. Initially, the cost will be higher, but that’s where the government subsidies will help bring the cost down. But you cannot build businesses based on subsidies. So, the Indian government has to really play some role to inspire companies. Work for the ecosystem has definitely begun with ongoing policies and the Chips Act. Now the government needs to come with Chips Act 2 and 3, and not just India – the U.S, E.U. and other countries will also need to do the same. This has to continue for a few years, maybe a decade. Once there’s a scale or a minimum mass, then the industry can grow and flourish.
