Can India be a player in the computer chip industry?

A dependable provide of laptop chips is crucial 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 essentially totally different from client or smartphone chips. They deal with huge volumes of information coming concurrently from lots of of hundreds of customers.

“These networks can not go down. Reliability, redundancy and fail-safe operation are important – the chip structure has to assist that,” Roy says.

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

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

“Virtually 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 Data Expertise.

What India lacks is firms that manufacture semiconductors.

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

The weak spot of that system was exposed during Covid, when the provision of chips dried up and corporations in all types 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 danger,” Roy says.

That spurred India to develop its personal semiconductor trade.

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

“That is why India is creating its personal semiconductor ecosystem to scale back danger and enhance 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 sturdy.

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

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

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

That third stage, referred to as Outsourced Semiconductor Meeting and Take a look at (Osat), is the a part of the manufacturing course of focused by India.

“Meeting, take a look at and packaging are simpler to begin 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 12 months.

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

Kaynes Semicon invested $260m (£270m) in a manufacturing facility to assemble and take a look at laptop chips within the northwestern state of Gujarat. Manufacturing began in November of final 12 months.

“Packaging isn’t just 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 important as making the chip itself with out this stage, the wafer is ineffective to trade.”

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

“India doesn’t want essentially the most complicated datacentre or AI chips on day one. That isn’t the place our demand is, and that’s not the place our power lies as we speak,” Panicker says.

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

“These are usually not glamorous chips, however they’re economically and strategically way more necessary 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 individuals for this earlier than,” Panicker says.

“Semiconductors demand a stage of self-discipline, documentation and course of management that may be very totally different from conventional manufacturing. That cultural shift is as necessary because the technical one.”

Getting employees educated has been an enormous problem.

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

Again in Bangalore, at Tejas Networks, Arnob Roy is trying 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 straight assist firms like ours.”

It is the beginning of a protracted 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 barely now starting to assist that type of funding.”