Aubiquitous component of 21st-century existence, semiconductors have emerged as the world’s most critical resource, known as the ‘new oil’ on which the modern world depends. With the global semiconductor industry projected to double to a trillion-dollar industry in the next ten years, driven by the growth of AI, cloud computing and electric vehicles, governments across the world are eyeing to set up a semiconductor ecosystem in-house.
India, too, has joined the race to set up fabs (semiconductor manufacturing facilities). As India is starting from scratch to build an entirely new industry in the country, Vinod Dham, known as the father of Pentium and a member of the advisory committee of India Semiconductor Mission, points out that India still has some important challenges to resolve in order to emerge as a key player amongst other semiconductor manufacturers.
Land, water, power
A ‘fab’, which is a term used for describing a semiconductor manufacturing facility, needs to be in a place with lots of space. For reasons of economics, it is more cost-efficient to build a cluster of fabs close to each other. However, this location should have a very good supply of water, since fabs are big water guzzlers. Also, the electric supply must be available 24X7, uninterrupted, 365 days a year, except for the scheduled maintenance.
As per Dham, the power should be free of any glitches since some of the semiconductor equipment used for building today’s chips with very fine geometries require glitch-free power. The location should be protected from natural disasters, especially earthquakes that can, unfortunately, render billions of dollars of fab and equipment irreparably damaged.
“In India, where the infrastructure is still not fully developed, and customs clearance can sometimes take up to days and weeks, it is imperative that the airport and customs for key components needed for export outside of India be placed right next to the cluster of fabs and the assembly, testing and packaging facilities. Moreover, the zones where semiconductor fabs and back end (assembly, test and packaging) are located should be by law protected from strikes and unnecessary time off provisions to enable competitiveness in the global markets,” the semiconductor veteran told BT.
Also, as Dham memtions, since a state-of-the-art fab can take up to five years before going into full production, not only full financing has to be in place to complete the job on time, but the labour should also be deployed through 365 days round the clock to make sure the fab is ready as quickly as possible.
“Even though India has tens of thousands of design engineers currently working with who’s who of the world’s top multinational semiconductor companies in India, there are hardly any semiconductor engineers trained in the knowledge of device physics and process technology, essential for fabricating and manufacturing chips designed by the design engineers,” said Dham.
This shortage of skilled workforce is plaguing not just India but countries like the US as well. And while, initially, experts can be called in from abroad to train our people, in the long term, we need to create skilled manpower in India.
According to Dham, beyond locating and building structures, fabs require a variety of high-purity gases and wafers to fabricate the chips. While initially, India will have to import many of these raw materials from sources outside our country, with time, some of these supplies can be brought in-house.
Building fabs is just one part of the process for India to become a semiconductor nation.
Dham says there should also be orders to fill those fabs. As fabs operate 24×7, there has to be a very high volume of chip orders to utilise the fabs fully. And this should be both for domestic consumption as well as export.
“If a fab is not run at over 90 per cent plus capacity round the clock, the chip costs will go up due to poor capacity utilisation,” he said.
As a result, these chips manufactured in India will be uncompetitive compared to more mature suppliers who have been well entrenched in global markets for the last 50 years.