Can India be a player in the computer chip industry?

A dependable provide of pc chips is important for Arnob Roy, the co-founder of Tejas Networks.

His firm, based mostly in Bangalore, India, provides the tools behind cell phone networks and broadband connections.

“Basically, we offer the electronics that carry site visitors throughout telecom networks,” he says.

That requires particular chips designed for telecoms duties.

“Telecom chips are basically completely different from client or smartphone chips. They deal with large volumes of information coming concurrently from a whole lot of 1000’s of customers.

“These networks can’t go down. Reliability, redundancy and fail-safe operation are crucial – the chip structure has to help that,” Roy says.

Tejas designs a lot of these chips in India, a rustic well-known for its experience in designing pc chips (also called semiconductors).

It is estimated that 20% of the world’s semiconductor engineers are in India.

“Nearly each main international chip firm has its largest or second-largest design centre in India, engaged on cutting-edge merchandise,” says Amitesh Kumar Sinha, Joint Secretary of India’s Ministry of Electronics and Info Expertise.

What India lacks is firms that manufacture semiconductors.

So Indian corporations like Tejas Neworks design the chips they want in India, however then have them manufactured abroad.

The weak point of that system was exposed during Covid, when the provision of chips dried up and corporations in all kinds of industries needed to cut back manufacturing.

“The pandemic made it clear that semiconductor manufacturing is just too concentrated globally, and that focus carries critical threat,” Roy says.

That spurred India to develop its personal semiconductor trade.

“Covid confirmed us how fragile international provide chains will be. If one a part of the world shuts down, electronics manufacturing all over the place is disrupted,” says Sinha.

“That is why India is creating its personal semiconductor ecosystem to cut back threat and improve resilience,” he provides.

He’s main authorities efforts to develop the semiconductor trade, which includes figuring out elements of the manufacturing course of the place India can compete.

There are several steps in making a computer chip. First design, the place India is already robust.

The second stage is wafer fabrication, the place skinny sheets of silicon have circuits etched on to them by extraordinarily costly machines in enormous factories often called semiconductor “fabs”.

That a part of the method, significantly for probably the most refined chips, is dominated by firms in Taiwan, with China attempting to catch up.

Within the third stage these massive silicon wafers are sliced up into particular person chips, packaged in protecting casing, related to contacts and examined.

That third stage, often called Outsourced Semiconductor Meeting and Check (Osat), is the a part of the manufacturing course of focused by India.

“Meeting, take a look at and packaging are simpler to start out than fabs and that’s the place India is shifting first,” says Ashok Chandak, president of India Electronics and Semiconductor Affiliation (IESA).

He says that a number of such vegetation will “enter mass manufacturing” this yr.

Based in 2023, Kaynes Semicon is the primary firm to get a semiconductor plant up and working with help from the Indian authorities.

Kaynes Semicon invested $260m (£270m) in a manufacturing facility to assemble and take a look at pc chips within the northwestern state of Gujarat. Manufacturing began in November of final yr.

“Packaging is not only placing a chip in a field. It is a 10 to 12 step manufacturing course of,” says Raghu Panicker, CEO of Kaynes Semicon.

“That is why packaging and testing are as crucial as making the chip itself with out this stage, the wafer is ineffective to trade.”

His facility won’t be making probably the most superior pc chips discovered within the newest cell phones or used for coaching AI.

“India doesn’t want probably the most advanced datacentre or AI chips on day one. That isn’t the place our demand is, and that isn’t the place our power lies at this time,” Panicker says.

As an alternative, they would be the form of chips utilized in vehicles, telecoms and the defence trade.

“These are usually not glamorous chips, however they’re economically and strategically much more essential for India. You construct an trade by first serving your personal market. Complexity can come later. Scale has to come back first,” he provides.

It has been a steep studying curve for Kaynes Semicon.

“We had by no means constructed a semiconductor cleanroom in India earlier than. We had by no means put in this tools earlier than. We had by no means educated folks for this earlier than,” Panicker says.

“Semiconductors demand a degree of self-discipline, documentation and course of management that could be very completely different from conventional manufacturing. That cultural shift is as essential because the technical one.”

Getting employees educated has been an enormous problem.

“Coaching takes time. You can not shortcut 5 years of expertise into six months. That’s the single largest bottleneck,” Panicker says.

Again in Bangalore, at Tejas Networks, Arnob Roy is wanting ahead to purchasing extra locally-sourced tech.

“Over the subsequent decade, we count on a major semiconductor manufacturing base to emerge in India and that may immediately assist firms like ours.”

It is the beginning of an extended journey, he says.

“I do see Indian firms ultimately designing and manufacturing full telecom chipsets however it’ll take affected person capital and time.

“Deep-tech merchandise take longer to mature, and India is just now starting to help that form of funding.”