Semiconductor Mission
‘Semicon India 2022’ Conference is being organised by India Semiconductor Mission in partnership with industry and industry associations under the visionary leadership of Hon’ble Prime Minister Shri Narendra Modi with the aim to make India a global hub for Semiconductor Design, Manufacturing and Technology Development which will help propel the vision of India Semiconductor Mission.
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Previous Attempts
- The first significant effort, a Special Incentive Package (SIP), was launched in 2007, but no result.
- Modified SIP performed better in 2012
- The Cabinet gave its approval to two consortiums with a tempting package of incentives. One was managed by Jaiprakash Associates in collaboration with IBM and the Israeli firm TowerJazz, and the other by Hindustan Semiconductor Manufacturing Company and ST Microelectronics. Together, the two fabs required an investment of $10 billion, and the government provided incentives in the form of cash payments and tax breaks totaling about $5 billion. Land was allocated and finalized for the factories. But in the end, neither was able to mobilize resources.
China’s chip production has increased quickly because of decreased manufacturing costs and a sizable electronics manufacturing sector. When the U.S., the established leader in this game, realized that, China was already one of the top chip producers. It has a strategic monopoly on the production of chips thanks to its market dominance in rare earths, which are necessary for chip manufacturing.
Issues & Advantages
Issues
- One of the riskiest investments is in a semiconductor fab. Before the technology is rendered obsolete, enormous sums must be reclaimed.
- It is difficult to imagine a factory that just serves the Domestic market.
- In a greenfield site, creating an ecosystem for chip manufacturing is extremely difficult.
- For chip production, hundreds of chemicals and gases are needed, along with the training of personnel and the provision of enough clean water.
- Art of producing chips is what matters most. Even with the best machinery, failing fabs can be caused by poor product quality and low yields.
- Decision to setup whether to put up a memory, analogue fabrication, or logic/processor fab
Advantages
- Small freight-to-price ratio.
- The Information Technology Agreement, 1996’s zero-customs duty policy allows production in a single place and international sales.
- Before the full-fledged fab is set up, Assembly, Testing, Packaging, and Marking (ATMP) is a relatively simple approach for developing the fab ecosystem.
- The benefits of purchasing existing fabs are numerous: they are cost-effective, have stabilised technology, a supply chain ecosystem, a proven product line, and a ready market. These will make it possible for India to develop its fab ecosystem and train its workforce.
Far less subsidies would be necessary, and the money saved might be put towards cutting-edge fab-related research and development that will aid in the construction of state-of-the-art fabs over the next few years.
Another tactic is to install ATMPs. Tessolve, which Tatas has since bought, established an ATMP in 2013–2014. Up to 7 nm feature size semiconductors are successfully packaged using this ATMP. China is home to around 100 ATMPs.
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