The work of making chips can start in a year: Vinod Dham

What’s different in India’s chip push this time?

There were virtually no trials in the past – there were separate attempts by private individuals, mostly from overseas, who would work with states, never with the federal government, to launch fabs. This didn’t materialize for the obvious reason that there are too many factors involved in building a fab – not only to build a fab, but you need to build an entire ecosystem. I know this because I was invited several times to be the lead in those activities.

This is the first time that the Indian government has acknowledged that this technology is important to India’s strategic interest to achieve some self-reliance, and perhaps capitalize on the fact that if the whole world takes advantage of it, it will double in 10 years. This market is happening, why can’t India take advantage of it?

Do you think the goals are achievable?

I see more feasibility, potential, and potential for it to happen than ever before. If it’s all smoke and mirrors, you can come, and you’ll look good for a while, but it will eventually extinguish. Let’s look at three or four different levels of it. If we sign up with an existing integrated equipment manufacturer (who has their own fabs), they can start tomorrow. It will take them about 18 months to build the fab. Then, let’s say, within two years, they manufacture their own products, have their own machines, and in the beginning they bring in their own people.

What we have given them is land, electricity, water etc., and an incentive of 70%. They can start production within a year or so after that, which makes it two and a half, max three years.

The long term is where we do a joint venture between an Indian partner and a foreign partner, where they bring in all the technology and equipment, and we bring in the capital, management and skills. The challenge for both will be which product they make into the fab.

can you elaborate?

Ideally, the incoming partner should have a product in mind. For that, we need to analyze the Indian market to find our top 10 needs as we are importing electronics worth $180 billion. The rule of thumb is 10-20% of the semiconductor price. If you round up, it’s $10-20 billion. These days, it’s more 20 than 10, because the number of chips that go into the device is bigger, which gives you a margin of $20 billion.

We need to analyze where do we have the edge and where can we try to build it for the Indian market. Otherwise the problem will be that the Indian market will buy from outside, if it can buy there at a lower price. We may have to give them a little encouragement initially to kick-start this whole thing.

We are trying to do a lot of things- train people, create demand, make products fab. Unlike the rest of the world, where it has been done for over 50 years, we are trying to do it over a period of five years, which is what makes it so complicated.

So, how do we do it?

What they (other countries) did in 50 years is that they learned things slowly. We don’t necessarily have to learn all that. For example, an 8nm node is an advanced sweet spot and is like a piece of cake (for the industry); Our engineers can learn this. Remember that the build side of it is also highly automated.

If the biggest semiconductor companies do R&D in India, why don’t we have the skills?

Our skill set is in design. We have enormous skill in very large scale integrated circuit (VLSI) design. There are around 25,000 design engineers in Bangalore who are designing chips for companies (such as Samsung, Intel, Qualcomm, etc.).

But what we are talking about is domestic manufacturing of chips. We want some engineers to step into startups, that’s why design incentives are being given. We will give them free tools and money to design the chips.

We have seen the PLI being modified to provide 50% incentive in technology nodes. What kind of fabs should India make?

We’re not there yet where we give the highest incentives to the most advanced nodes. We are not pushing for it ourselves. It’s not the best way to start, so we laid it flat.

Have Indian companies shown interest?

We have three local offers only for semiconductors. We have a few proposals for displays, and dozens more for PLIs associated with the design. Our job as consultants is to evaluate and advise how to make it work if there is feasibility. There is also a whole group of people who look at financial viability. Right now we are going through that process.

Do you have a timeline in mind, like when someone actually starts working here?

We should see it within a year.