EDITORIAL ANALYSIS : India’s semiconductor mission might need a compass

Source: The Hindu

Prelims: Current events of national importance,semiconductor, Aadhaar, Aarogya Setu, Unified Payments Interface (UPI), GaN, GaAs, Silicon Carbide etc
Mains GS Paper II and III: Development process and the development industry-the role of NGOs,SHGs etc

ARTICLE HIGHLIGHTS

The United States Department of Commerce and its Indian counterpart have recently concluded a memorandum of understanding
- It ensures that subsidies by each country do not come in the way of India’s semiconductor dreams, as espoused by the semiconductor policy 2021.

INSIGHTS ON THE ISSUE

Context

Semiconductors:

Any of a class of crystalline solids intermediate in electrical conductivity between a conductor and an insulator.
Semiconductors are employed in the manufacture of various kinds of electronic devices, including diodes, transistors, and integrated circuits.
Semiconductors have found wide application because of their compactness, reliability, power efficiency, and low cost.
As discrete components, they have found use in power devices, optical sensors, and light emitters, including solid-state lasers.

India Semiconductor Mission(ISM):

The ISM was launched in 2021 with a total financial outlay of Rs76,000 crore under the aegis of the Ministry of Electronics and IT (MeitY).
Part of the comprehensive program for the development of sustainable semiconductor and display ecosystems in the country.
Aim: To provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem.
ISM will serve as the nodal agency for efficient, coherent and smooth implementation of the schemes.

Components:

Scheme for setting up of Semiconductor Fabs in India: aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country.
Scheme for setting up of Display Fabs in India: aimed at attracting large investments for setting up TFT LCD / AMOLED based display fabrication facilities in the country.
Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India
Design Linked Incentive (DLI) Scheme

India-US engagement in semiconductor sector:

The U.S. Department of State has engaged with India to beef up sector-specific export control laws in the semiconductor space
- India has agreed to it.
It might lead to a global major such as Intel to invest in India in order to set up a greenfield 300mm wafer fabrication plant costing over $10 billion

Semiconductor development in India:

The Semi-Conductor Laboratory (SCL) was set up in Mohali in 1983
The Vision of creating an electronics ecosystem in an era when Keltron, Uptron and Webel were fledgling entities in a pre-liberalised India aimed at consumer electronics.
SCL Mohali is a technology stack similar to others such as Aadhaar, Aarogya Setu and the Unified Payments Interface (UPI) acting as a force multiplier effect.
It encourages many integrated circuit design startups in India to consider designing for India.

Challenges:

No joint venture partner has been found, keeping SCL employees in limbo.
The focus at MeITY seems aimed at attracting Intel into India to set up a fab.
Intel primarily operates at <22nm node and 300mm, requiring over $10 billion in upgrade cost to the SCL.

What steps need to be taken?

Leverage human and capital assets at the SCL to build on what exists in a targeted manner
To jumpstart the semiconductor mission by taking advantage of recent technological breakthroughs in a class of semiconductors that do not need advanced lithography equipment.
The “More than Moore” segment of >180 nm node involves:
- mixed signal analog (BCD and SiGe)
- wide bandgap (GaN, GaAs, Silicon Carbide) for RF
- power markets leveraging existing lithography capability
- An investment of $50-$100 million may result in the development of Indian solutions for:
  - automotive electronics (EV traction inverters/on board chargers)
  - PV-Inverters
  - 5G infra-power amplifiers
  - Railway electronics (traction inverters)
  - Creating the Indian equivalent of Bosch, Siemens, ABB, Mitsubishi Electric, Thales and ELTA.
- The upgrade has to be backed by subsidies aimed at fabless design houses with proven design (sales of >$100 million per year) willing to fabricate at the SCL in the 180nm+ node (and possibly transfer process intellectual patents if they have any).
- The subsidies have to be aimed at global design companies with products aimed at India-specific markets such as motor drives for BLDC fans or e-bike chargers.
  - The existing DLI/PLI schemes provide no such incentives to proven global fabless design companies.

Way Forward

The recent efforts by the India Semiconductor Mission to open up subsidies to global small and medium-sized enterprises in the upstream supply chain are welcome because an existing facility like the SCL will benefit from this.
- It should be coupled with the incentives defined above and also upgrades targeted at different sets of players.
The stakes are high as a lack of clarity and inaction may lead to India completely missing out on the semiconductor fabrication bus.
- There should be course correction on incentive targets.
To execute this vision in the next five years, the SCL needs a full-time director with prior “More than Moore” foundry experience than have a career scientist from the Department of Space, as is the case now.
- This is because there is a multifaceted market that needs to be served.