Naandika covers startups, tech, corporate and human interest stories. She holds a postgraduate degree from Indian Institute of Journalism and New Media (IIJNM, Bangalore), with specialisation in Business and Investigative journalism. Apart from writing for the magazine, Naandika also handles social media, events and the Blogs section on forbesindia.com. Outside of work, you will find her traveling and exploring new places, volunteering for NGOs, rescuing animals, and mostly spending time around them.
During the 10th Vibrant Gujarat Global Summit being held in Gandhinagar, the Tata Group and South Korea’s Simmtech announced their plans to boost the semiconductor industry in India by setting up plants in Gujarat. Union Minister for Electronics and Information Technology Ashwini Vaishnaw, too, indicated a push for the industry while addressing the Semiconductor and Electronics Seminar on the second day of the summit, announcing that Gujarat is poised to manufacture the country's first Make-in-India chip in 2024.
However, the timelines might be slightly optimistic given that as Micron Technology CEO Sanjay Mehrotra stated on Wednesday that the facility’s cleanroom space will be operational only by early 2025, setting a more realistic timeline for the project. (The earlier deadline was December 2024.) “Even I was surprised to hear that chip will be made this year,” Ajit Manocha, president and CEO of SEMI, the global industry association serving the semiconductor and electronics manufacturing and design supply chain, told Forbes India. On the sidelines of the summit, Manocha, who is an advisory member of the government's Indian Semiconductor Mission, caught up with us for a quick chat about India’s progress in this space and what it will take for the country to catch the missed bus. Edited excerpts:
Q. India is gradually moving forward in the semiconductor sector. But how long will it take to catch up?
For the first time, the stars are aligned in favour of India. The policies, vision, and mission are precise and clear. Micron has already made history, and this will start attracting more companies to the ecosystem. For instance, Tata also made the announcement during the summit. But we still have to identify the other barriers to our success. The major ones are the lack of ecosystems, which is going to come as a function of time. So far, we have only a limited number of hubs in the world. And if one of them sneezes, we all catch a cold. That's what happens with the supply chain, like we witnessed during the pandemic. Climate change and geopolitical issues also contributed to the chip shortage. And it’s not fixed yet. Because of the economic downturn these days, demand has reduced, but the fundamentals of the supply chain are still broken. This industry is doubling in size in the next 6–10 years, and we can't afford to have a limited number of hubs in the world. And when I say a limited number of hubs, that is China, Taiwan, South Korea, Japan, the USA, and Europe. If any of these hubs have an issue, it will create a chip shortage supply chain problem.
Q. Do any of the countries have an end-to-end value chain for making semiconductor chips?
Nobody in the world has it. Before a chip is made, the whole process makes three round trips around the world. The silicon ingots come from one place, then Japan makes silicon wafers, and the design comes to the US. Wafer manufacturing happens mostly in Taiwan or South Korea. Assembly and testing happen in Southeast Asia. And then sometime testing back in the US, and also the distribution mostly in the US. It's a huge, complex process from start to finish. Not one country can do it all. Especially with the scale and volume we're talking about. It makes sense for the current ecosystem, but it is not immune to geopolitical and climate issues. The solution to that is that we need to have a few more hubs in the system. If something goes wrong in one part of the world, it does not put the whole industry or the whole world at a standstill.
Q. During the Vibrant Gujarat Summit, it was announced that India's first semiconductor chip will be produced in Gujarat this year. So how is that possible?
I think that’s a mistake. It's going to take six to nine months for the construction to finish. It will take a bit more than a year. But if they [the government] have an aggressive business plan that they can produce this year, I'll be very happy to hear that. Neither I'm questioning it nor I'm challenging it. I heard it too, and I was happy about it. But I was surprised that it could happen so fast.
Q. During the seminar, you mentioned the talent shortage in this sector. Can you elaborate more on it?
Skill shortages are a global problem in this industry. There's not a single country in the world that says, ‘I don't have a problem with the talent’. Overall, STEM education in the Western world has gone down by a factor of two in the last 20 years. And population control in Asian countries has been very popular. There used to be two or more children per couple. Now it is 1.3 children per couple. So, if you look at the STEM education population, it has gone down by a factor of two. But industry is going up by a factor of two. Some gaps will be closed by artificial intelligence (AI) and other automation. Yet, by 2030, we will need one million additional workers in the semiconductor industry because there's a large retiring or ageing population in this sector. And the growth of semiconductors is tremendous, with about 94 fabs coming online between 2022 and 2026.
Q. What is the role of artificial intelligence in semiconductors?
AI has been playing a role in semiconductors for a long time, and there's a lot more to be done by AI. All these new applications, which are AI-based, need hardware to support the AI applications. At present, these AI-based chips consume lots of energy. That is another problem, because we can't be an energy-guzzler to solve the problems. There are a lot of opportunities for innovating new materials to make chips. AI-based chips will be the most preferred in the future, but they will also consume a lot of energy. So that is a bit of a drawback.