India possesses great scientific expertise for expertise development. Yet, we haven’t been in a position to emerge as a semiconductor Technology chief; IP possession in innovative expertise nonetheless evades India in most segments.
What are India’s possibilities of breaking into the elite membership of expertise management?
Ashwin Rangan, Senior VP of Engineering and Chief Information and Innovation Officer, ICANN (Internet Corporation for Assigned Names and Numbers) who was conferred the distinguished 2022 SoCal CIO of the Year ORBIE Award in US not too long ago, is consulted by many nations and corporates, for expertise technique. In this interview, he sheds mild on rising applied sciences, the complexities of semiconductor manufacturing, and India’s strengths and weaknesses.
Q. Where does India stand within the IT ecosystem?
In the ecosystem boundaries, on the prime of the funnel, there’s {hardware} and software program. The prime layer in software program is purposes, under that’s embedded software program. Semiconductors come alive when actual time working techniques software program allow componentry. There is value-add and value-capture in each these layers.
In {hardware}, there’s a complete stack of applied sciences, with massive industries chargeable for manufacturing them. These are computing, networking and storage units like smartphones, tablets, and so forth. Mechanical componentry and semiconductors should be sourced from totally different elements of the world to deliver these units collectively.
At the very best degree, this requires assembling circuit boards into plastic and steel casings, to create these ultimate units; there’s value-add and seize there. Then, there’s circuit board manufacturing, the place packaged semiconductors (chips) are soldered onto circuit boards. Very low value-add work, however nonetheless required. Going a degree deeper, there’s backend semiconductor meeting and packaging, which tends to be extremely automated.
Finally there’s semiconductor wafer fabrication that is the place the majority of worth addition happens. When you break that into logic circuits and reminiscence circuits, logic circuitry is very delicate mental property and tends to be the place the lion’s share of worth seize happens; much less so with reminiscence circuitry, the place many of the worth has already been subsumed due to excessive automation, excessive commoditisation, and low switching prices.
Q. What is India’s current functionality in absorbing this worth seize?
Let’s ask the place now we have strategic energy versus potential alternative. On the software program facet, we possess strategic energy within the utility area the place legitimacy has been established. That’s the place we made our presence on this planet recognized for the final 40 years via firms like TCS, Wipro, Cognizant, Infosys… the checklist goes on.
India is famend for creating and helping firms in constructing utility software program, however not within the creation of authentic utility software program. That’s altering. There is excessive worth seize in platforms created in India not too long ago; Zoho is an instance of a platform that may probably up-end established gamers in a brand new world the place “cloud first” is the applying mantra.
In the {hardware} area, India has potential in each layer on that stack of applied sciences. In each layer above the foundry layer, the place the manufacturing of semiconductors happens, others have staked a declare.
For packaging and testing, nations like Philippines, Vietnam and Malaysia have captured the house with a lion’s share of that market. South Korea which began in packaging and testing, is more and more transferring in direction of greater worth seize semiconductor manufacturing, relegating pure again finish meeting and testing to neighbouring nations.
It’s a really complicated international provide chain that requires excessive ranges of coordination throughout a number of distributors with excessive predictability of supply. Circuit design happens within the US; semiconductor manufacturing, backend meeting and testing, circuit board manufacturing, all happen in several elements of the world, and ultimate packaging of those into the tip shopper unit happens largely in China, and to some extent in India.
These are pure logistics and provide chain oriented challenges, there’s positively a possibility for India right here.
Q. What is the outlook within the chip manufacturing area globally?
The semiconductor chip business is about $ 550-600 billion yearly, rising about 10-12% yearly. Plenty of the innovation is happening in Logic chips.Twenty years in the past, 90% of logic circuit demand was for CPUs, and 10% for FPGAs (area programmable gate arrays). That market has grow to be extra specialised, primarily based on purposes. Today, the logic circuit market is damaged into 4 totally different segments: CPUs (the place Intel dominates), GPUs (the place NVIDIA has a dominant market share), TPUs (which Google owns), and the FPGA section, which has grown considerably.
Twenty-five years in the past, 40-50% of all logic chip manufacturing was once within the US. Today, that quantity might be about 10%. With the emergence of foundries, which simply manufacture semiconductors, increasingly more of manufacturing has been captured by pure play foundries like TSMC.
For chip design, firms like Skyworks, Broadcom or Qualcomm specialize on this exercise. These firms search for foundries who could make these chips for an inexpensive value, with wonderful logistics backing.
As US-based firms look to the long run, it is extremely clear that IP is in danger as many nations that they rely on grow to be query marks when it comes to stability. For instance, the Taiwan Strait scenario is a possible menace to the soundness of the worldwide semiconductor provide chain, as a result of TSMC is basically primarily based there. Recognizing that danger, the US Government not too long ago made obtainable 52 billion {dollars} in funding to advertise manufacturing of semiconductors within the US.
Re-shoring isn’t the one answer to this. Countries like India, with bettering infrastructure, might grow to be secure alternate options.
Q. What will it take to attain this?
Improved, persistently dependable infrastructure is a obligatory prerequisite; there is a chance right here. Semiconductor fabrication might be essentially the most complicated manufacturing course of. When I studied it, it had 183 discreet steps to etch chips onto a wafer that may then be sawn, bonded, examined and packaged. It requires immense investments. The time to manufacturing from breaking floor to the primary wafer lot that goes via is about 3 to 4 years.
Each of TSMC’s Arizona crops might be about $17 billion. The constructing itself is only a shell. The degree of funding is due to the complicated, refined manufacturing equipment wanted. For occasion, ASML, a Netherlands-based firm, is the one provider of bleeding-edge lithography tools. Similarly Tokyo Electronics for etching tools, KLA Tencor for measurement and inspection, Applied Materials for ion-implementation, Carl Zeiss lenses from Germany, and so forth. It prices a whole lot of thousands and thousands of {dollars} for every tools sort or piece.
Q. Can India afford to have a fab contemplating how complicated the method is?
There is a chance for India to play a job, offered it makes the investments not solely within the manufacturing facility and tools, but in addition in predictable logistics and transport capabilities. This is a excessive value-capture alternative from a method perspective. It begins with industrial coverage and help. You bought to start out someplace.
In the US, Intel is breaking floor on a few foundries. However, it’s not even clear that they will afford to go it alone profitably, except they get native assist and help when it comes to tax breaks or employment incentives within the location that they select. In Germany, they’re being given help to the tune of eight billion {dollars}, along with about $15 billion of their very own funding.
On manufacturing functionality, a contemporary foundry wants about 3000 folks to function them 24/7, one year. There is a chance for high-paying jobs, ‘do it properly, and win the trust of the global supply chain’.
Q. India launched its semiconductor coverage in 2019,and is but to take off. Do you suppose India can preserve the promise and develop its fab?
Wafer fab builds are sometimes recognized to run a 12 months or two years plus or minus. I wouldn’t make an enormous deal of a 12 months or two delay, given the pandemic and all of the ensuing disruptions.
One wants no less than $15-20 billion at this time for a brand new wafer fab. If you wait two years, that quantity will go as much as 20-25 billion, as a result of expertise would’ve moved, resulting in higher sophistication.
We might select to have foundries which aren’t on the modern. The different factor that will make sense for prime worth seize level can be specialty semiconductors. What is it that India desires to do is simply as vital as whom to associate with and how much tools is required.
Q. What about India’s international Trust index?
The belief issue has improved in lots of different industries, resembling drug manufacturing and distribution, handheld telephones, the place we went from no manufacturing functionality to about 300 firms in just a few years. That creates the legitimacy to say sure, India is more and more a world participant.
With semiconductors, that (belief issue) must be considerably bolstered, as a result of complete business segments might be stymied when semiconductor manufacturing and demand exit of sync. For instance, automotive manufacturing in US fell sharply through the pandemic as a result of at this time, so many automotive parts are semiconductor-driven. As a consequence, the automotive business was held hostage by the scarcity in semiconductor provides wanted. Reliable, predictable price and provide of semiconductors is a requirement for different industries to outlive, depart alone thrive. With semiconductors, it requires belief that’s at a considerably greater degree than with different sub-assembly and cargo industries.
(Choodi Shivaram is a senior freelance journalist)
Source web site: www.hindustantimes.com
