Saturday, December 18, 2010

Need to develop robust Indian semicon industry, led by local companies!

I came across an article titled “Global Semiconductor Companies Turn to India for Growth” published on India Knowledge@Wharton. Isn’t this reason why global semiconductor companies enter a specific market in the first place — to grow their own markets and regions? So, why should it be different with India?

India is very well known globally for its talent, chip design capabilities (especially in the Indian arms of the global semicon firms) and as the world’s embedded bastion!

This particular article is brilliantly written, and kudos the author. The clinching paragraph is tucked away at the end, starting with: “None of the global players, however, is currently looking at setting up a semiconductor fabrication plant, or “fab,” in India.”

What’s happened up until now in the Indian semicon industry? If one were to look at the Special Incentive Package Scheme (SIPS), which was introduced back in Sept. 2007 by the government of India, it was geared toward encouraging investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!

It also defined the “ecosystem units” as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.

A Karnataka Semicon Policy was announced in early Feb. 2010, during the India Semiconductor Association’s ( ISA) Vision Summit.

Next, the government of India’s thrust on solar/PV, via the Jawaharlal Nehru National Solar Mission (JN-NSM), has at least ensured the country’s solar/PV future.

What has happened since all of these policies? Really, nothing much, at least from the perspective of the Indian semicon industry. If it has, at least, I am unaware, and my apologies for this ignorance.

Of course, solar/PV seems to be going from strength to strength! Recently, NTPC Vidyut Vyapar Nigam Ltd (NVVN) put out the list of selected solar projects under the JN-NSM Phase 1, Batch 1. But that’s another story!

On this very blog, there are several posts that speak of India’s ability or inability to build a fab. At first, folks said that semicon fabs were on their way in India, and that the story isn’t disappearing. However, somewhere along the line, that particular vision took a beating and fabs simply disappeared from the Indian semicon radar!

So, where is India?
Well, we all know that so far, India has not even managed to have a small foundry, forget about having a fab! We’ve have had semicon policies (eg. SIPS), but all it has led to is the so-called growth of the Indian solar/PV industry — and that too largely because of the Indian government’s focus on JN-NSM. The results are there for everyone to see.

The Indian semiconductor industry has not even managed to develop, nurture and build many (or any?) fabless companies of note. Very few semicon product start-ups of note have happened. Again, if there are many such entities, and they are also flourishing, please pardon me for my ignorance.

Can anyone tell us how many Indian fabless semicon companies have come up in the past five years? How many globally known Indian semicon product start-ups are there in our country for that matter? Where are the ATMP units? Even a mixture of 10 such companies does not constitute an industry, similar to one sunny day not making a summer!

Need for local, Indian firms to lead the way!
Global semicon firms are definitely looking at India to grow their market, but where’s the Indian semicon industry? I thought we were all talking about and concerned with developing the Indian semiconductor industry — with local Indian companies leading the way! They should lead the way! They should be growing their market segments!!

China is a market that is accessed and will continue to be accessed by global semicon firms for future and long-term growth. However, China developed the local industry as well, and continues to do so. At least this is how we’ve all seen it happen in China. So why not at least try and replicate the same model in India? At least, some of it?

The Indian semiconductor industry is extremely close to my heart. I badly want it to succeed, as much as you do! With my extremely limited knowledge about semiconductors, I even try to mentor, connect and guide companies, as well as friends from the industry in whatever little manner I can!

Old fashioned hard work and execution required!
I was reading some slides from Future Horizon’s Industry Forecast Seminar 2011 (IFS 2011), held this week in London.

One of the slides from Malcolm Penn, its CEO, says: “The really good news – there are so many new markets, products and solutions! What’s needed? Semiconductor devices – lots of them, everything, everywhere!”

I couldn’t agree more!

How can the Indian semiconductor industry be part of this global success story? As Penn says: “No magic bullets, just old fashioned hard work and execution.”

There are other lines from one of Malcolm Penn’s slide, which says: “Semicon provides the knowledge and technologies that generate some 10 percent of global GDP. This message has now got through to the EU.”

The global semicon companies will continue to turn at India for their growth. However, it is time that the Indian semicon industry understood this message.

The Indian industry needs to put its hands together and get down to doing all of the hard work required, and deliver! We should also attempt, and try to replicate at least some of what has taken place in China, and develop, nurture and grow the Indian semicon industry. Here’s where the ISA can play a really significant role!

We cannot really succeed unless we can develop a robust Indian semicon industry that is led by local companies. Time is still on our side! Go for it, guys!

PS: ISA, request, please don’t change your name to ISEA! Kindly maintain the focus on semicon as the country needs it!

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