As India continues its efforts to attract foreign chipmaking companies for establishing foundries within the country, the lack of attention towards India’s sole semiconductor fab situated in Mohali, Punjab, over the years was indeed concerning. Established in 1983, the Semi-Conductor Laboratory (SCL) was set up with the primary objective of promoting the indigenous manufacturing of semiconductor devices, integrated circuits, and other electronics components, crucial for the electronics industry.
Credited with making chips that have been used for Mangalyaan, India’s Mars Orbiter Mission, SCL is already equipped with industry-grade machinery and production lines. “SCL in India stands as one of the rare semiconductor manufacturers that can proudly claim their chips have journeyed to the Moon and Mars,” Anshuman Tripathi, member of the National Security Advisory Board (NSAB), told AIM.
It possesses the capacity to fabricate 200 millimetres (mm) of silicon wafers using the 180 nanometres (nm) process node at a rate of several thousand units per month. Identifying the need to benefit from the already existing fab, in May 2023, the Union government announced a USD 2 billion investment for commercialisation and modernisation of SCL.
This is a welcome move since India’s semiconductor initiative necessitates the transformation of SCL into a commercial entity. Arun Mampazhy, a semiconductor analyst, emphasises that India’s journey towards semiconductor self-reliance hinges on the revitalisation of SCL, marking it as the starting point for achieving an atma nirbhar status in this field.
Modernisation without commercialisation is a likely disaster
For quite some time, the government has emphasised the commercialisation and modernisation of SCL. Last year, MeitY initiated a ‘request for proposal’ (RFP) to identify an agency that would serve as a ‘Transaction Cum Legal Adviser’ for the modernisation or commercialisation of SCL. According to Mampazhy, both commercialisation and modernisation, are equally critical, and modernisation without commercialisation will most likely be a disaster.
Nonetheless, the current plan, as reports suggest, is to transform SCL into an entity with volume production and profitable assets. The objective is to expand SCL’s capabilities across semiconductor design, fabrication, testing, and packaging, aiming to enhance competitiveness, quality, and cost-effectiveness across a broader range of products.
“When opting for modernisation, it must be intricately tied to successful commercialisation, a process that should inherently involve various industry stakeholders, including customers, financial institutions, as well as research institutions and universities. Without the involvement of these key stakeholders, genuine commercialisation cannot be effectively achieved,” Ravindra Prakash Dubey, founder and president, IITians4Nation, said.
Mampazhy even emphasises that commercialisation of SCL is, in fact, the most critical part. So far, despite government initiatives and aid, there are no concrete plans for a fab in India as of yet. Initially, the Vendetta-Foxconn joint venture appeared promising, however, the partnership eventually dissolved, leading to indications that both entities are now independently exploring the construction of fabs.
Even though Union Minister Rajeev Chandrasekhar did suggest that an announcement for a fab is imminent, however, for someone to come in and set up a fab, and to ensure it runs at full capacity, it will take many years. Hence, India should look inward and build on its existing capacity. According to Mampazhy, that is a more viable and logical option for India. Previously, according to an Economic Times report from 2020, the Indian Space Research Organisation (ISRO), which managed SCL at that time, planned to build chips with 65-nanometre nodes.
Even though 180 nm chips are used in microprocessors, network equipment, and memory chips, the use of 180 nm chips has decreased over time as more advanced process technologies have been developed. Hence, if SCL can start producing 65 nm chips, as reported earlier, it could be a significant boost to India’s semiconductor ecosystem.
Research: Applied vs Academic
Chandrasekhar also announced that an India Semiconductor Research Centre (ISRC) will be set up which will work in collaboration with top institutions like the IITs on cutting-edge semiconductor research. Dubey, who also mentors multiple startup incubations at different IITs, said that linking SCL with the different R&D labs in the country could be the right step in terms of the proposed commercialisation plans. But it is also critical to ensure that the research done should not just languish in books and research papers.
“We should begin by assessing the effectiveness of the Indian research ecosystem in transforming research into practical business ventures or viable solutions,” Tripathi said. Today, one drawback of the research ecosystem in India is that it often does not lead to practical solutions. This is not just limited to semiconductor research, the same can be said about other fields such as AI.
“Moreover, when we talk about research, we must differentiate between applied research and research done by academicians. It’s crucial to distinguish between these two aspects,” Tripathi said. If the aim of ISRC is applied research, then the responsibility shouldn’t lie with academics. “For example, I began my career at STMicroelectronics, where I focused on practical and applied research rather than publishing papers,” Tripathi added.
Mampazhy, on the other hand, raises a further greater concern. He is afraid that the SCL could turn into a research tool in the hands of academics. This could have dire consequences, for example, in a commercial fab, the machines operate continuously round the clock to avoid frequent recalibrations. “Each time these machines are powered on and off, they require recalibration, consuming time and resources, including dummy wafers. The rapid depreciation of machine value also adds to the challenge. In essence, this approach could become a continual financial burden for the government with limited tangible outcomes,” Mampazhy told AIM.
Despite limited orders, SCL possibly maintains a similar operational model with employees working in three shifts (not confirmed). “If ISRC takes charge of SCL and follows the same practice, it might result in inefficient use of energy. However, if it opts to run operations only during the daytime, it raises concerns about potential layoffs affecting a significant portion of the workforce,” he added.
Leadership is key
Moreover, effective leadership is crucial for SCL’s optimal growth. While currently led by a director, appointing a CEO and possibly a CTO is vital for its successful commercialisation. Similarly, the leadership of ISRC and the nature of research are also significant considerations. Given SCL is currently under MeitY, it should not meet a similar fate as the Indian Semiconductor Mission (ISL), which still hasn’t managed to find a suitable CEO, despite reports in 2022 suggesting that government will hire someone with over 25 years of experience in the semiconductor industry and more than 10 years of experience at a global level.
In a previous interaction with AIM, Mampazhy had said, “The CEO is a joint secretary of the Ministry of Electronics and IT (MeitY) and has absolutely no semiconductor background. The CTO is a scientist at MeitY and he too has had no real exposure to the semiconductor industry throughout his career.” Hence, it becomes critical that SCL or even ISRC does not go down the same line, and is run by someone with an entrepreneurial mindset. Dubey concurs, and further adds that an entrepreneur mindset is very important in transforming research into practical business ventures and viable solutions.
