It's Sahasra Electronics, the chipmaker who came in from the cold

Most of the 2.5-hour drive from Delhi to the Electron­ic Industries Association of India’s manufacturing cluster in Bhiwadi, in Rajasthan’s Alwar district, is on the NH48. But once you leave the highway, there is a bumpy two-lane road to test your resolve.

When you get into the campus, the first facility on the left catches the eye with its state-of-the-art symbols of modern engineering. It also has cutting-edge equipment hard at work. The urgency is understandable.
 

In three weeks, give or take a few days, this unit on the left will roll out India’s first semiconductor memory chip, marking the country’s first step into the futuristic segment. Semiconductor chips are used in anything that uses advanced electronics, be it smartphones, cars, or rockets.
 

Curiously, it is the unheralded Sahasra Electronics that is poised to steal the march over more fancied outfits in rolling out India’s first chip. It was not supposed to.

It could have been Foxconn. But the world’s largest contract electronics manufacturer said on July 10 it had withdrawn from its $19.5 billion semiconductor joint venture with Vedanta, a conglomerate with businesses ranging from oil to metals. The Taiwan-based giant is now exploring other avenues.
 

It could have been the United States-based Micron Technology, which is setting up a semiconductor assembly and test facility in Gujarat. However, the facility is expected to become operational only in late 2024.
 

In the meantime, against the backdrop of the government’s $10 billion semiconductor programme and constantly changing headlines of global partnerships, Sahasra marches on quietly, without the backing of any major investor nor in collaboration with any global semiconductor player.
 

“Frankly speaking, everything is complex. A lot of automation has come in. So far, we have not signed up any technology partners. But we have a lot of well-wishers who have helped us by sharing knowledge with us,” says Varun Manwani, director, Sahasra Group.
 

On Wednesday, Sahasra emerged as one of the four notable Indian applicants — the others are Dixon Technologies, VVDN Technologies, and Optiemus Infracom — to apply for the government’s revised information technology hardware production-linked incentive scheme for manufacturing laptops, tablets, servers, and edge computing devices within the country.
 

In Bhiwadi, its greenfield facility is spread over two acres, with a built-up area of 6,000 square metres dedicated to the semiconductor assembly plant. The construction of the plant started in January 2021 and was completed in two years.
 

“There is still a lot of equipment coming because it is an absolutely new facility. But enough equipment is in place. We are going to start mass production in September 2023,” says Manwani.
 

Throughout the plant, soft tones inspired by nature dominate the colour palette. The exterior of the two-storey plant has translucent glass walls separated by brown beams and columns. Through these walls, one can see faint silhouettes of the machinery and intricate processes that will soon come to life.
 

On the ground floor, the factory has two cleanrooms, housing equipment that can turn the most advanced semiconductor wafers into IC (integrated circuit) packages or, simply, the memory and logic chips that will go into electronic devices. The chip assembly plant is capable of packaging six- to 12-inch wafers. The top floor has office space for engineering teams and cabins

for the directors.
 

The facility can produce millions of chips, but that will be in stages. Currently, the headcount is 17 people. It will take six to 12 months to scale up manufacturing. The company is in talks with at least 25 customers, which will be buying the final product, for different product categories. In the first financial year, the targeted revenue is Rs 20 crore to Rs 25 crore.
 

In the first phase, the focus is on memory chip products. The facility will roll out what is known as “standard packaging”, and supply products like micro SD cards, small outline packages, and small outline integrated circuit packages, with pin counts within these packages. The trial production was in March this year.
 

Founded in 2000 by Amrit Manwani, a Indian Institute of Technology Kanpur graduate, who is now the chairman, Sahasra has four manufacturing plants in the National Capital Region (NCR) and one in Rwanda, Africa.
 

From its early days, it focused on fabrication of printed circuit boards, wire harnesses, plastic injection moulding, as well as electronics manufacturing services for original equipment manufacturers. It ventured into the solid-state memory business in 2016, with a reference from “one of the very close well-wishers” in Taiwan, and started manufacturing memory products for Hewlett Packard.
 

“We had a contract with PNY Taiwan. Through this brand licence, we manufactured for HP. Subsequently, we started manufacturing for Sony. Unfortunately, Sony quit the memory business worldwide in 2018,” Manwani says.
 

The idea of backward integration into packaging of memory ICs came up while doing business with Sony.
 

“We realised there was a huge gap in technology, knowledge, people, everything. That’s how we came to OSAT,” says Manwani.
 

OSAT is short for outsourced semiconductor assembly and test. The semiconductor ecosystem also has fab plants, ATMP (assembly, testing, marking and packaging) facilities, and chip design facilities.
 

In July 2020, Sahasra Semiconductors started as a new company. The promoters of the company — the Manwani family and the Desai family — have made the entire investment with credit from HDFC Bank and CitiBank. In Phase 1, the total investment is Rs 160 crore ($20 million), of which Rs 120 crore has already been committed for the plant building and machinery. The rest is for the remaining equipment. In Phase 2, the planned investment is $30 million.
 

The company has applied for incentives under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, which provides a financial incentive of up to 25 per cent on capital expenditure for electronics that comprise the downstream value chain of electronics products such as electronic components, semiconductor or display fabrication units, etc.
 

Isn’t Manwani worried about competition from global biggies such as Micron and Foxconn?
 

“We do not take them as competition at all. As they are bigger players, they will be able to pull in the entire semiconductor ecosystem much better than what we are going to be able to pull in. Secondly, everybody coming into this space will have to come up with their niche. Globally, no company can do everything,” he says.
 

But why the land-locked Bhiwadi?
 

Other chipmakers are looking at better port connectivity. Manwani says the lightweight material required for the OSAT facility makes Bhiwadi as good a location as any, with additional benefits such as proximity to Gurugram and the NCR.
 

“Chip as an end product is not heavy. Talking about export, it is primarily going to be by air. For distribution within the country, we are close to the Delhi-Mumbai industrial corridor and freight corridor. Similarly, the input materials — wafer, wires, films and tapes — to be imported are not heavy,” he says.

What about the commute?
 

Manwani travels to the plant every day from Jasola, in the heart of Delhi, negotiating the bump and grind. The day this correspondent visited the plant, there was a truck overturned near a ditch on the two-lane stretch that begins after the highway.

“There is a different way to reach here, whereby you can bypass at least 80 per cent of these rough patches. Unfortunately,

that is a much longer way of coming here,” says Manwani.
 

You do not get to be the first to a milestone by taking the longer road.

CHIPPING AWAY

> Global memory chipmaker Micron has announced a $2.75 billion project in Gujarat

> Foxconn called off its venture with Vedanta, but aims to build chip fabs separately

> UAE’s Next Orbit Ventures and Israel’s Tower Semiconductor have a consortium for a fab unit

> Singapore-based IGSS Ventures plans to build a $3.5 billion semiconductor hi-tech park

> US semiconductor firm GlobalFoundries is reportedly looking for a local partner

WHERE IT COMES FROM

> Founded in 2000, named Sahasra (Hindi for millenn­ium) due to its year of foundation

> In early days, focused on fabrication of printed cir­cuit boards and electronics manufacturing services

> Ventured into solid-state memory business in 2016; manufactured memory products for HP

> Idea of backward inte­gration into packaging of memory ICs came up while doing business with Sony

> In July 2020, incorporated Sahasra Semiconductors

> Promoters have made the entire investment, with credit from HDFC Bank and CitiBank

> Phase 1 total investment: $20 mn; Phase 2: $30 mn