Enough demand in India to take care of 5-6 fab plants: Ashwini Vaishnaw

'There is a huge demand for chips from automobiles, electronics, railways, the defence industry, power electronics amongst others', said Vaishnaw

The government has spelled out the incentives and eligibility criteria for kickstarting the country’s semiconductor ecosystem. Minister of Communications and IT Ashwini Vaishnaw lays out the next steps to make it a reality in an interview with Surajeet Das Gupta. Edited excerpts:   

You have pegged the amount of incentive support for the semi-conductor fab project to the size of the chips in terms of nanometers. What is the reason?   

In chips with sizes between 28-45 nanometers, we expect the highest overall demand from users and this will stay for the next 10-15 years. But we will also be asking from the companies, as part of the conditions, for the roadmap for manufacturing chips of 14 nanometers and below. We clearly don’t want them to do only the high nanometer chips.  

But will you have the money (the total package is $10 billion) for, say, a proposal of a fab plant now which wants to begin with 14 nanometers and below? Such plants obviously require more investment which could go up to $7-8 billion.

Of course, we have the flexibility and this will be decided by the Indian Semiconductor Mission which we will set up. We have the intent and the thought process of moving beyond.

Do you think there is a need to incentivize fabless players (like Qualcomm or Meditek) who outsource manufacturing to global chip manufacturers such as TSMC so that they shift some of their contracts to Indian fab plants?

No we will not do that. Today, we manufacture electronics worth $75 billion which is good enough to take care of 5-6 fab plants in India. And electronics production will go even higher to over $250 billion. There is a huge demand for chips from automobiles, electronics, railways, the defence industry, power electronics amongst others. And, of course, there will be exports too.

How has the response from global and Indian companies been to the incentives?

It has been good. We were looking at 15 OSAT and compound semiconductor players to come in.  We are expecting much more now. We were also looking for 50 product design companies to be eligible and, again, we expect many more. Indian companies are also looking at participating with global companies for technology in the fab space. In fact, we called global semiconductor equipment makers and they said that about 30 per cent of their equipment ‘bill of material’ comes from in India.

Infrastructure has been a sore point for potential fab players. How do you plan to resolve this issue?

The key requirements are ultra clean water, uninterrupted power, and talented engineers. We have given a road map for training 85,000 qualified engineers to support the effort.