Udyog Sanchetana (E) - SemiConductor Spl.

Semiconductor in INDIA

1. Semiconductors of various types power a wide variety of appliances ranging in size from iPhones, wrist watches, remote switches and electric toasters, to laptops, dishwashers, washing machines, TV sets and refrigerators in the medium range. They also power automobiles, civilian space rockets, extraterrestrial landing modules and both conventional military and nuclear warhead carrying missiles. Further, the miniaturisation of semiconductors has reached such mind boggling diminution, that back-of-the-envelope calculations indicate that if every household in India were to be assured a car, TV and a refrigerator ,this would require 500 billion transistors! For every act of modern endeavour such as accessing data through internet, for the home router or for use of? artificial intelligence, chips are indispensable.

What is remarkable is that chips of various descriptions are being designed and manufactured with great precision at the rate of a trillion a year. Yet, barring the electrical engineers and scientists engaged in this task, most of us have never seen a chip, and don't need to. While using various appliances, chips manufactured at one of the leading fabricating units such as TSMC (Taiwan), Intel (US) or Samsung (S Korea) are used by us, as they are embedded in millions or even billions in our appliances, even though we haven't bought chips directly from any of these companies.???????

2. Supply Chain

2. The entire semiconductor industry constitutes a long, mutually interdependent, multinational supply chain, largely located on either side of the Pacific seaboard, with some pockets of excellence in Europe, notably the Netherlands. The core of design and manufacturing is spread over the US, Taiwan, South Korea, Japan and PRC (China), while critical-tool manufacturing outside the US is in the Netherlands, where ASML (an affiliate of Philips) enjoys a monopoly in manufacturing EUV photolithography machines. It is this supply chain that took a tremendous beating during the COVID years. Suddenly, manufacturers of a wide variety of products, ranging from cars to iPhones, experienced shortage of vital chips of various types. Not just these, but more particularly very advanced GPU chips, designs for which are made exclusively by Nvidia in the US. These, in turn, were dependent for their output on critical tools, designs, chemical, gases, raw materials, packaging infra etc - without which the leading semiconductor manufacturers of the world came to a grinding halt. In this context, it would be relevant to know that Taiwan Semiconductor Manufacturing Company (TSMC) alone, has a 55% market share for chip manufacture, and a 90% market share for the advanced GPU chip manufacture needed by artificial intelligence, and further, catering to nodes as miniaturised as 1-2 nanometres. Another factor in supply chain disruption, apart from COVID, is the rapidly deteriorating geopolitical situation across the Taiwan Strait.

Further, with the intensification of the US-China trade war coupled with US apprehensions of being overtaken in the chip technology competition by PRC, the Americans have enacted in 2022, what is known as the Chips Act. This legislation seeks to incentivise through extension of a subsidy (over a period) of about $50 billion and accompanying tax concessions, the establishment of new ultra-modern ' fabs' or chip manufacturing units in the continental United States - more particularly in Silicon Valley, also increasingly known as "Cerebral Valley". More important, this Act seeks to prohibit sale of sensitive node producing technology including EUV photolithography machines to PRC, thereby upsetting cost relationship Apple, ??and even TSMC had enjoyed hitherto, with the PRC.

3. India's Belated Entry.????????????????????

3.1 ?With a view to kickstart India 's grand plan to build a semiconductor ecosystem, the PM set in motion 3 semiconductor projects in a live virtual conference on 13th April '24. The plants, when established will be cumulatively worth $15 billion( INR 125 trillion ). The online event, dubbed as "India's Techade - Chips for Viksit Bharat", witnessed the PM address the skilled youth of the country,while explaining briefly, the potential of such projects in employment. It also marked a significant milestone in Indo- Taiwanese collaboration. The most high-profile project amongst the three is the chip manufacturing plant at Dholera in Gujarat. This project is being jointly established by Tata Electronics and the Powerchip Semiconductor Manufacturing Corporation (PSMC) of Taiwan as its "technology partner". A 300 mm wafer fab (fabricating unit) here is set to produce chips in the nodes of 28-55 nanometre processing technology. When operational, it will be India 's first commercial semiconductor fab in over 37 years. The facility is projected to have a monthly production capacity of 50,000 wafers, when ready in 2026, and help create 20,000 skilled jobs. The total investment in the Dholera fab is about $11 billion (about INR 910 billion). About 70% of this investment would be sourced from the Central Govt (50% subsidised by the Modified Programme for Semiconductors and Display Fab Ecosystem Scheme, and 20% from other studies). The remainder will be funded by the Tata group. PSMC will not invest in or operate the facility directly. It will be responsible for transferring technology to the Indian operators and contribute to employee training.???????????

3.2 On this occasion the PM also announced the launch of two Outsourced Semiconductor Assembly & Test (OSAT) facilities - one in Morigaon (Assam) to be operated by Tata Sons, and the other in Sanand (Gujarat) to be operated by CG Power & Industrial Solutions Ltd. For the former, an investment of $3.5 billion (INR 275 billion) is indicated with an employment potential of 30,000 jobs . The Sanand project will have, as its technology partner, Micron Technology based in Boise, Idaho, US .This is one of the original semiconductor manufacturing companies in the US which played a major role in competing with the Japanese in DRAM (memory chips) manufacture, during the height of the US-Japanese trade war of the 1980s. However, its assistance in Sanand will not be in chip manufacture, but in assembly and testing of both DRAM (Dynamic Random Access Memory) and NAND (also a memory chip with retention capability),? manufactured by Micron. Micron's investment will be about $825 million overall, and is expected to create about 5,000 jobs directly, and 15,000 jobs indirectly. Under the ATMP (Assembly, Testing, Marking & Packaging) scheme, Micron will receive 50% fiscal support for the total project from the Central govt (Ministry of Electronics & Information Technology), as also 20% of project cost from the Govt of Gujarat. The combined investment in the project will be of the order of $2.75 billion.??????????

3.3 No doubt ,the expectations of the govt are high in the three projects. However, the fact remains that only one viz Dholera is a "fab" ie a semiconductor manufacturing project, and that too ,with the lesser-known PSMC? as technology partner (and not the world renowned TSMC). The other two, in Assam and Sanand (Gujarat) are low-end OSAT or Assembly and Testing projects only. The latter activity has already been in existence for decades in Malaysia, Singapore and Thailand, and will soon commence in Vietnam too. Today, the largest and most advanced Fabs are in Taiwan, S Korea and Japan, in that order .The only fab of any significance in the continental US is Intel, which also has its monopoly over the architecture of the x86 microprocessors. Before legislating the Chips Act in 2022, US policy has been to dominate in chip design viz Nvidia, and farm out manufacture to overseas Fabs like TSMC, Samsung et al. The OSAT activity has been diversified among the semiconductor ' coolies' like Malaysia ,Thailand and now Vietnam. Are we destined to join the latter, or will we be capable soon enough to make our mark in either design or manufacture, or both????????????????????????

4. Vocabulary for Layman

(a) Vacuum tube: A device which controls flow of electric current in a high vacuum between electrodes to which an electric potential difference has been applied. It also amplifies current, but not to the extent a 'transistor' does, and besides occupies much more space and consumes more power in the process.??????????????????

(b) Transistor: Its main function is to amplify the current in a circuit ,while consuming little power. In the digital context , a transistor is a switch in which - using the binary '1' and '0' - the '1' denotes ' on', while the '0' denotes 'off', w.r.t. passage of current in a semiconductor-bearing electric circuit.???????????????????

(c) Wafer - is a thin slice of semiconductor substance like crystalline silicon. It can be manufactured in varying diameters as required, and then sliced into much smaller pieces, on which after appropriate treatment, integrated circuits can be embedded.?????????

(d) Semiconductor - has an electrical conductivity value between that of a conductor of electricity eg Copper, and an insulator like glass. Examples of semiconductors are elements like Silicon, Germanium or compounds like Gallium Arsenide. The conductivity of these can be enhanced by 'doping' i.e. adding certain impurities .????????????????

(e) Integrated circuit - comprises several transistors wired together and embedded in a silicon piece. It is also called a "Chip".????????????????????

(f) Nanometre - is the unit used to measure a 'node'; or to measure the size of a tiny integrated circuit; it is equal to one billionth of a metre!??????????????????????

(g) Fab- is a fabricating unit for manufacturing chips; it is also called a 'foundry'.????????????????

(h) Fabless - or? design making units .These specialise only in designing chips ; not in manufacturing them ,which they get done in "Fabs".????????

(i) Photoresists - are organic compounds like polymers ,solvents, resins etc, which when applied to a wafer substrate and subjected to light of different wavelengths, including ultraviolet light, is found to be photosensitive.???????????

(j) Masks - used for making semiconductor chips originally meant a glass sheet on which the integrated circuit design was imprinted. Through the process of photolithography, this is then imprinted in miniaturised but perfect form on to the wafer. Coated as the latter is with Silicon dioxide, resulting in a 'substrate', the printing takes place on this. Glass is no longer used now, and the preferred mask is of quartz.????????????

(k) Logic chips - are engineered for processing. They are built for high speed computation and decision making. Both CPUs (central processing units or the brain of the computer) and GPUs (graphic processing units) are Logic chips.

(l) Memory chips - facilitate rapid access of memory. There are two types viz DRAM or Dynamic Random Access Memory ie it is accessible for an operation; and NAND which facilitates storage of memory.

(m) Analog chips - these are like sensors that convert visual or audio signals into digital data. Here, a constant effort or race to miniaturise or shrink transistor size is not necessary.

(n) Photolithography - is a process, which is critical to miniaturising the transistors, so as to accommodate more and more in an integrated circuit. Jay Lathrop ,an engineer was the first to use a microscope in an inverted form to achieve this. He passed light through a mask with a transistor design pattern on it and then through the inverted microscope lens, so as to fall on a wafer substrate coated with a photoresist. In the exposed portion of the resist, he noticed a perfect reproduction of the design, now very much reduced in size. The process (much more refined now) came to be referred as photolithography, and with ultramodern machines in operation now, this is critical to the mass production of chips.??????????????

5. Reference for History

Read a definitive book " Chip War " by Dr Chris Miller, published in 2022. Dr Miller is neither electrical engineer nor chip scientist but a Professor of History in the Fletcher School of Tufts University - specialising in Russian history!????????

6. Developments over 75 years in Transistors, Integrated circuits, Design, PCs, Memory, Logic and Analog Chips, Photolithography etc.??????????????

6.1 Transistor: In 1947, Bell company scientists Walter Brattain and John Bardeen, pursuing pioneering work already done by an engineer Shockley, succeeded in ensuring flow of current through a block of germanium (also a semiconductor). This rudimentary transistor twas found to amplify current far more - with less use of power - for far longer than the cumbersome conventional vacuum tube, currently in wide use. The three men would share the Nobel Prize for their discovery.??????????????????????

6.2 Integrated Circuit - In the initial years it was cumbersome to link transistors together with a jingle of wires. Jack Kilby ,then working in Texas Instruments (TI), found a way in 1958 to overcome the cumbersome process of transistor aggregation, by putting multiple transistors and connecting wires on a single slab of Silicon. He called this embedded system, an Integrated Circuit. He shared the Nobel Prize for this discovery with a Russian, Zhores Alferov, who had done parallel work.??????????????????? ????

6.3 Chips: Now ,there was need to mass produce these, and ensure economies of scale ,so as to be a marketable proposition. In 1957, a new company Fairchild, formed by former TI employees like Bob Noyce ,Gordon Moore, and Andy Grove, etched holes in the Si wafer, coated it with Silicon dioxide - this film insulated the connecting wires from each other preventing leakage ,and at the same time ,facilitating a planar configuration. This in turn would make it possible to mass produce these. The products would be called 'chips' .???????

6.4 Moore's Law: In 1965, Gordon Moore would note that the number of transistors on a given space of chip would multiply twice over, every year .This came to be known as Moore's Law .Remarkably ,it is valid even today and explains how ,over nearly sixty years ,the transistor size has shrunk so much as to accommodate several billion on a chip ,the size of a thumb nail .???????

6.5 Memory Chips or 'Drams' - The year 1968 ,Bob Noyce and Gordon Moore ,who helped create Fairchild Semiconductors, moved further to establish Integrated Electronics or Intel. This company blazed a brilliant trail in 1970 to move beyond ' magnetic cores' for remembering data, and? created DRAMs (Dynamic Random Access Memory), or the memory chip. Together with a capacitor or storage device and a transistor embedded in a Si piece, there would soon be a multiplicity of DRAMs packed in Si, confirming Moore's prediction.?????????????

6.6 Logic chip - this is the one that would do the calculations rapidly, even "think" or correct itself according to the design.??????????

6.7 With passage of time ,there would be standardised logic chips using appropriate software, instead of being anchored to 'customized ' or tedious 'made to order' chips.???????????????????????

6.8 Importance of Chip Design - Having a proper workable? design of circuitry leading to various permutations and combinations of connected transistors is a prerequisite for the manufacture? of a chip. Only after confirming that the design of a chip works can its mass production be undertaken.??????????????

6.9 Military and Space race urgency: Military urgency to produce the atomic bomb before Nazi Germany gave the necessary stimulus in the early 1940s to the Manhattan Project. By a similar analogy, the US was motivated by? competition in respect of chip development by the rapid progress by the Soviet Union in nuclear missile development and successes in space exploration, resulting in the creation of Minuteman II missile and NASA's Apollo programme. The ongoing Vietnam war, for its part would incentivise the development of precision guided and chip mounted conventional missiles and bombs.??

6.10 Rise of Japan - Japan would become the first Asian country with the ability to absorb and assimilate the new technological developments in the US under the pioneering zeal of Akio Morita of Sony and others. Japan would soon acquire mastery over DRAM memory? production and also in doing this cheaply at the expense of US companies. The Japanese chip revolution paved the way for their dominance in the decade 1975-85 in consumer electronics, handheld calculators and radios, and even more important, the iconic Walkmans.????????????

6.11 Encouraging investment by US companies in East Asia in Assembly, Testing and Packaging to save labour costs - US companies, with Fairchild Semiconductors leading the way in 1963, established the first Assembly and Testing etc factory overseas in Hong Kong. Soon, other manufacturers like TI, Motorola and others would open facilities for assembly and testing in Taiwan, S. Korea, Singapore and Penang (Malaysia), providing considerable employment to their local population.?

6.12 Taming Japan - Much as the US favoured Japan's preoccupation with technological development in the immediate post-war period, it now became rapidly apparent that the Japanese were producing semiconductor items far more efficiently and at far lower cost than in the US. This set in motion the US-Japan DRAM or Trade War. This resulted in a negotiated settlement whereby Japan's DRAM exports were subject to a quota. However, US firms would still move away from DRAM production, and with IBM marketing their PCs, Intel worked on and the created the architecture for the PC's x-86 architecture, which would be extremely profitable.?????????

6.13 Chips in Conventional Warfare dominance - With the humiliating withdrawal of the US from Vietnam in 1975, with a predominantly agrarian power seemingly standing up to a mighty superpower, America mounted a determined technological quest to offset purported preponderance in conventional strength of their ideological opponents in Europe and elsewhere. The newly inaugurated chip-bearing missiles, bombs and other weaponry imparted such immense precision to both US conventional and nuclear arms as never envisaged before. The Gulf War I of 1990-91 witnessed the first manifestation of this US technological transformation in the destruction of the Iraqi war machine.

6.14 Standardisation of Chip Design: While the importance of chip design has been mentioned at sub-para 6.8 above. However, in the initial years, design was customised to suit each order, and subject to "design rules" unique to each company. A breakthrough in standardisation was made by two engineers Lynn Conway and Carver Mead, who pioneered the programming of a machine to design circuits. They drew up a set of mathematical design rules for computer programmes to automate chip design. In this manner, it became possible to avoid sketching locations of each transistor as had been the case hitherto. The Mead-Convey revolution led in due course to software tools for semiconductor design. Today every chip company uses software tools from any one of three chip design companies viz Synopsis, Cadence and Mentor, which for their part earn huge intellectual property and licensing fees in the process.?????

6.15 Rise of Samsung (S. Korea) - Samsung was nothing more than a dried fish and vegetable trading company .It had been established in 1938 by Lee Byung Chul. The company and its owner? survived the violent transition of Japanese rule, then North Korean occupation followed by US occupation in the early '50s. Lee would collaborate on various ventures with the Americans in the period 1950-1985. As the US-Japanese chip war reached its climax, Samsung? - with the full support of its govt - entered the chip domain and soon became a serious competitor to Japan in DRAM production and sales. This was, without doubt, with US blessings, comfortable as they were in weakening competition against themselves through a policy of divide and patronise! Today Samsung is a major manufacturer of high-quality chips next to Taiwan in Asia.

6.16 Taiwan - Right from the early '60s, thanks to the far-sighted policy of its political leadership, Taiwan had, with the help of TI, set up an Assembly & Testing establishment for semiconductors. However, after 20 years at this low end of the supply chain Taiwan was anxious to be in the top league by manufacturing high-quality products. Besides, their efforts to forge ahead with the help of an American? technology partner RCA had failed to add value to Taiwan. Technology partners did not easily part with know-how.??????????????

6.17 Advent of Morris Chang and founding of TSMC - Morris Chang was a mainland Chinese who had reached the US in the late 40s and trained as an engineer in MIT, and risen up the ranks of TI contributing enormously to their transistor yields in high quality. Having been passed over for CEO ship in TI, he was in the lookout for fresh opportunities, which he found in an ambitious Taiwan in 1987. This year marked the establishment of Taiwan Semiconductor Manufacturing Company (TSMC) under his leadership. This period would also mark TSMC's entering into an iconic partnership with a? subsidiary of the Dutch firm Philips, called ASML - which would go on to become the sole producer of high quality photolithography machines.?????????????

6.18 Fabs and Fabless design companies.

Morris Chang would be instrumental in pioneering the separation of the two activities of

(a) design companies focussing on this high quality work alone ie "fabless" activity, while

(b) the highly expensive work of R&D and manufacture of semiconductors of extremely small nodes ie compressing transistor size to ever tinier dimensions would remain the domain of 'fabs' or 'foundries'. Thus the topmost design companies are in the US, while TSMC, Samsung and others focus on R&D and manufacture of high-quality chips of various types .?????????????????????

6.19 With the advent of the 2000s, the application of Moore's Law was relentless, and smartphones, PC and server chips migrated to ever newer nodes measured in nanometers. The length of the "transistor gate ", which turned off and on the conductivity of the chip, gave for several years the nomenclature of the 'node', and defined the manufacturing technology. Thus from 1999 onwards the nodes shrank progressively through 180 nm, 130 nm, 90 nm, 65 nm and 45nm, packing more and more chips into a transistor.

6.20 3D FINFET architecture - Ultra-miniaturisation resulted in current leakage, encouraging the "stacking " of chips one over the other, separated by an ultra thin SiO2 film ,resulting in a finlike (3D) protrusion (called Finfet), departing from the 2D planar composition of the chip so far. This enhanced the electric field applied and consequently ensured better flow of electrons ,and far greater density of transistor packing . This required greater precision in deposition of film ,etching and lithography .??????????????

6.21 Sole Proprietorship of? ASML in Photolithography - The US- Japan trade war of the mid-80s successfully aimed at stifling Japanese competition in making DRAM memory chips had other manifestations too .The US was uncomfortable with Japanese companies like Canon and Nikon manufacturing photolithography equipment, over and above the Dutch ASML. Both militarily (through NATO) and culturally, the Dutch were preferred by the Americans to the Japanese. The outcome was that the Japanese companies moved out of the photolithography sphere leaving the field to sole dominance by ASML. This, of course, has been to TSMC's distinct advantage, given its almost proprietary linkage with ASML forged earlier by the visionary Morris Chang.

6.22 US Dominance over Critical Chip related Toolmaking - Applied Materials is the world's most specialised toolmaker dedicated to depositing chemical films on wafers. Lam Research specialised in etching circuits on Si wafers . KLA specialised in tools that could detect nanometer sized errors on wafers and lithography masks .These toolmakers are able to work on atomic scales .It is impossible to manufacture chips without access to American tools.???????

?6.23 US Dominance in Chip Design - The dominance of Nvidia in advanced chip design, particularly GPU chips is absolute .A similar dominance in the software capable of laying out transistors on the scale of billions is provided by any one of 3 US companies viz Cadence ,Synopsis and Mentor .It is considered impossible to design an advanced chip without taking recourse to any one of the above three, with huge attendant costs of intellectual property and licence fees payable to them.???

6.24 Arrival of China - Mainland? China or PRC, had an interest in semiconductors, thanks to its gifted scientists - many with institutional links with the US- even in the 1950s. However, with Maoist ideology impacting adversely on scientific development, the Chinese initiative suffered reversal and a catastrophic shutdown in the '60s due to the "cultural revolution". However, post-Mao, after '76 there was a revival of interest in this field .Despite this ,and the ostensible opening of? doors to western technology ,the PRC had been smarting as its semiconductor industry had been confined to the low end assembly and testing only. It was at this stage that (in 2000), another native born Chinese? scientist trained in the US - in Texas Instruments (TI) - Richard Chang, approached the Chinese govt, offering to help them set up a semiconductor manufacturing hub ,given the wealth of his experience. The Chinese govt readily welcomed his offer ,having had a bitter experience with their Japanese technology partner viz NEC ,which (very much like the behaviour of American technology partners earlier with Taiwan ,Korea and Japan itself) had been reluctant to part with critical knowhow. Richard Chang endeavoured to change all this by getting the Chinese govt to create (the now well-known) the Semiconductor Manufacturing International Corporation ( or (SMIC) in Shanghai .He was also instrumental in securing for them international investment from Moto behind the technology leaders in fab building. With this addition, together with the world's leading fab companies of TSMC and Samsung, America's fabless semiconductor designers were immensely benefited. At this stage, SMIC even enjoyed a "validated user" status certification from the US, to the effect that it did not sell to the Chinese military!??????????

7. Late 1940s to about 2020

In the above paragraph, from sub-para 6.1 to 6.24, the developments during the period between the have been covered. This encompasses the discoveries of the transistor; the importance of semiconductors (particularly Silicon); the development of the integrated circuit; the shrinkage in the size of the transistor and development of the chip; the development of lithography followed by ultraviolet? photolithography; the formulation and continued validation of Moore's Law; and the stimulation of research and development catalysed by defence missile and space exploration objectives.

The pioneering work in this respect was done in the US - many of the contributing companies being in Silicon Valley. Companies like TI, IBM, Intel, Fairchild Semiconductors, Micron, ARM and others made sterling contributions. Among the pioneering engineers and scientists - which included Nobel laureates - were names like William Shockley ,Walter Brattain, John Bardeen, Noyce, Andy Grove, Gordon Moore, Jay Lathrop, Carver Mead and several others. In the early '60s it was Fairchild which took the lead - in order to minimise labour costs - to outsource assembly and testing to Hong Kong .

The narrative covers the growth of post-war Japan into a technological giant due to the pioneering efforts of entrepreneurs like Akio Morita ,as also the US-Japan trade war it triggered off ,the growth of competing South Korea ,and then Taiwan under the guidance of Morris Chang .The discussion also highlights the growth of China, and the common experience of Japan, Taiwan and China with western (particularly American ) technology partners ,who were anxious to keep the collaborating Asian countries confined to low-end assembly and testing only by avoiding transfer of advanced? technology .

8. Lesson for latecomer India.?

8.1 ?Semiconductor Design & Manufacturing Equipment Design in India - Integrated Circuit( IC) design is a source of strength for India. Approximately 1,25,000 persons are employed in design, and annually 3000 individual ICs are estimated to be designed in the country. In terms of Very Large Scale Integration ( VLSI) - which refers to the process of creating an IC by combining billions of MOS (metal oxide) transistors onto a single chip - Indian is estimated to account for 15% of global production .Almost every one of the world's top 25 design companies, notably NVIDIA, TI, Intel and Qualcom, have design and R&D centres in India ,and much of this presence is centred in Bangalore.?

8.2 TI was the first global technology company to set up an R&D centre in India in Bangalore in 1985, and continues to retain an appreciable semiconductor presence in the country employing over 2500 engineers working closely with nearly 1000 engineering colleges across the country. Synopsis - a leading American software design company works in the country to provide solutions across markets, including high performance computing, automation, security and manufacturing solutions, employing nearly 5,500 persons .The company has recently announced signing of MOUs with IIT Bombay and IISc Bangalore on research partnerships, educational software and curricula and faculty development programmes to support workforce development. Additionally, through collaborations with the Indian Govt's Chips-to-Startups programme (C2S) and Synopsis SARA programmes , Synopsis is working with more than 400 universities for talent creation in various domains.??

8.3 In July '23, semiconductor developer Advanced Micro Devices (AMD)announced a 5 year $400 million investment in India that includes a new campus in Bangalore that will serve as the country's largest design centre, as well as the addition of 3000 new engineering jobs, raising AMD's total work force in the country to nearly 10,000 by 2028.??????????????????????

8.4 Beyond IC design ,India is also a hub of semiconductor manufacturing equipment design. In 2000, Lam Research Corporation, a US manufacturer of equipment for thin film deposition, plasma etch, photoresist strip and wafer-cleaning processes, launched Lam Research India. The unit, which now employs over 2000 Indian workers, focussed on software development and support, hardware engineering, global operations management and analytics. In particular, Lam India 's hardware team designs sub - assemblies and subsystems for all Lam product lines. Further, in June '23, Lam announced plans to train upto 60,000 Indian engineers through its Semiverse Solutions virtual fabrication platform to accelerate India's semiconductor education and workforce development goals . In support of the skilling initiative ,Lam signed a MOU with Centre for Nanoscience & Engg (CeNSE)? at the IISc in Bangalore. Lam also proposed a $25 million investment to set up a new laboratory in the State of Karnataka.???????????

8.5 In the same month, Applied Materials, another semiconductor toolmaker, announced plans to invest $400 million over 4 years to launch a new engineering centre in India, which will support the creation of 500 new advanced engineering jobs.

8.6 Having said this, it has to be candidly admitted that most of the design work performed in India services foreign multinationals, and hasn't so? far given rise to a significant local design ecosystem. As of Feb 2023, India had fielded an estimated 21 startups between semiconductor design and manufacturing space. One startup of note is Mindgrove Technologies ,a Chennai based SoC developer, specialising in designing 28 nm chips for connected devices such as automobiles, medical devices, wearables, smart electric and water meters and home appliances. Other notable Indian design startups include Saankhya Labs and Signalchip.?

9. More on China????????????

9.1 In sub-para 6.4, China 's efforts at acquiring the necessary technology to become an influential semiconductor power have been discussed. With the advent of Xi Jin Ping as China's dominant leader ,the prevalent semiconductor ecosystem in China appeared to receive a cold and dispassionate review. While China had seemingly done the impossible in ensuring that the internet did not penetrate Chinese information space as anticipated by the West, and further they had even? managed to curb Google and Facebook and counter them with effective Chinese equivalents, and also US technological giants like IBM and Apple had been permitted to operate in China entirely on the latter's terms and yet repatriate huge profits, yet the review revealed certain disquieting features.??????????????

9.2 The extremely troubling fact was that China's imports of semiconductors were increasing each year - far exceeding in value even their oil imports - and the design and production of the most advanced chips was being done mostly by their geopolitical rivals like the US, Japan, S.Korea, Taiwan and the Netherlands - to mention the leading ones .This included software, tools, intellectual property dominance .This realisation motivated a great deal of subsequent Chinese initiatives towards the seemingly impossible quest for chip independence .The belief of impossibility- which continues till date, for perfectly credible reasons arising out of the prohibitory steps taken by the US subsequently - arises because of the long " supply chain " characterizing the chip creation ecosystem. Despite the separation between fabless units dealing with design, and the fabs coping with actual manufacture of semiconductors ,and further the location (for the most part) of the former in the continental United States ,and of the latter in Taiwan and S Korea (and also to some extent in Japan) - with the exception of Intel and AMD located in the US- there were other critically indispensable entities to be factored in as well .These were the highly specialised tool makers like Lam Research, Applied Materials and KLA, which were? US based. To add to this was the most indispensable of them all viz ASML, based in the Netherlands which makes the seemingly unreplicable EUV lithography machine .This again is dependant for its working on the US-based company Cymer for producing? specialised light sources. A common feature of all these countries is that, despite the ostensible 'globalisation' and mutual competition between them, they are all dependent on the US through military security alliances ,and therefore susceptible to compliance with US dictats prohibiting or regulating their business relationships with China . This weaponisation of chips. would manifest itself in US policy through enactment of the Chips Act and consequent regulations framed under it by the US Commerce Dept. In many ways, it was reminiscent of the US trade war with Japan over the latter's predominance in DRAM memory chip manufacture in the 1980s (driving their American counterparts into the ground), and the tacit encouragement given? to both Korea's Samsung and Taiwan's TSMC to compete with Japan and reduce their market share . Only now, the stakes for the Americans are higher ,and they have invoked issues of national security vis-a- vis China on the ground of the latter indulging in electronic espionage ,which they did not with Japan, though cheating through intellectual property theft figured with Japan too.

9.3 The US curbs on Huawei in particular ,and China generally - In the post-Mao period of scientific development ,with the opening of China's economy to western investment and infusion of technology, coupled with its entry into WTO ,the world's markets had been flooded for nearly four decades with Chinese goods of all types .Many were of exceptionally high quality at comparatively low cost ,but none more remarkably than electronic goods .With the advent of the 2010s , there were several internationally? competitive? Chinese companies became visible ,the most prominent among these being Huawei. From a petty manufacturer of simple phone switches ,the company had in a quarter century metamorphosed to producing the most advanced? telecom and networking gear .What is more ,it's R&D spending rivalled many US technological giants like Intel. It not only produced hardware for cell towers, it also produced cutting edge chips for smart phones. This ,in American eyes ,could not be allowed to continue, and it's burgeoning activity had to be regulated ,and if possible ,curbed.

9.4 Given the fact that Chinese electronicf products ,often fitted with their own chips but produced using American software or sophisticated tools, or tools of their allies, were being sold in US markets at extremely competitive prices, was an extremely bitter pill to swallow. To add to this was the inconvenient fact that high-end Chinese designed chips were being manufactured by TSMC, and further, China was the latter's second largest customer.

9.6 With the advent of the Trump administration, the brewing trade dispute around China's hugely favourable balance with the US, coupled with allegations of unfair subsidies by the Chinese govt to its own companies, blew up into an open denial of access, not only to sophisticated chips to? China in general, but to Huawei in particular. In an orchestrated manner, US allies like Australia and then Britain put Huawei on the black list ,and later the Netherlands-based ASML cut China out of sales of the ultra-sophisticated EUV lithography machines needed for making the latest sub-3 nm chips. Also, TSMC and Samsung were roped into the "denial ring" by declining to fabricate chips conforming to the latest Chinese chip designs. That there was a military dimension to this high end chip technology denial through implementation of the Chips Act of 2022, consequent to China's acquisition of missiles capable of threatening US military assets in the Taiwan Strait and beyond ,was very much evident. But this was not all .It was ,in fact ,the disturbing realisation that without technology denial ,it was impossible to even imagine a chip and AI technological lead over China in the late 2020s.??????????????????

9.7 Chinese indigenous effort to surmount US hurdles - Despite the Chips Act restrictions targeting sale of logic ICs in the 16nm/14nm range and below, as also a ban on sale of critical tools like EUV lithography machines by ASML of Netherlands needed for printing of semiconductors below 5nm node ,China quietly announced in Aug '23 that Huawei had started selling what is known as HuwMate 60 PRO Karen 9000s .They sprang a huge surprise by announcing that this was of 7nm node .It was clear that it had been produced by their national champion SMIC. In fact, the Asianometry weekly had featured details of this achievement a few months back. While detractors in the west appear to be smug - despite the 7nm shock - consoling themselves with the thought that the Chinese are still 3-5 years behind TSMC which has been making 2-nm chips through their ready access to EUV (extreme ultraviolet lithography) machines, the fact remains that their new chip facilitates 5G connectivity. This has been confirmed, even though the Chinese have not been publicizing this fact - preferring to perpetuate the myth that Huawei is crippled by western sanctions. It appears, Huawei's subsidiary Hi-Silicon is actually the beneficiary of? the 7 nm chip ,which has been produced by SMIC using the Deep ultraviolet immersion lithography machines already in their possession .These machines use 193 nm ultraviolet light ,and the process the Chinese are likely to have followed is one of multi patterning w.r.t. use of the mask, and then multistacking on the substrate to achieve such a high level of miniaturisation.

9.8 While Qualcomm and Apple have been selling China (SMIC) millions of chips of a non-prohibited dimension, now with the availability of large numbers of the 7nm chip for domestic consumption and likely export, the sales of Qualcomm and Apple are expected to plummet with loss of market share. Forecasts in the Asianometry commentaries are to the effect that China is perfectly capable of producing even smaller 5 nm chips using the same painstaking multi patterning and multistacking process with the available DUV immersion lithography machines in their inventory ,even as the US and its allies contemplate banning access to DUV machines in addition to the EUV (which uses light of 13.5 nm, and employs a process of producing photons by bombarding vaporised tin ,and reflecting this with molybdenum mirrors ,before projecting the miniaturised design pattern; and involves a machine with more than 4,50,000 parts!)apart from various essential tools made by Applied Materials ,Lam Research and Tokyo Electronics .The challenge for China - which is investing billions of dollars into R&D - is to replicate not only an EUV machine but also the sophisticated tools made by entities on the US mainland .??????????????

10. India Roundup

India had in fact? set up a public sector Semiconductor Complex Ltd( SCL)? at Mohali ,as far back as 1984 ,starting with a 5000 nm process, which rapidly advanced to? 800 nm technology ,which was perhaps just a year or two behind the then leaders in the US .At that time both Taiwan and China were not yet into fabs! In fact ,Morris Chang shifted to Taiwan from the US to help set up TSMC only in 1987. A devastating fire in the Mohali premises? in 1989-? the origins of which were perhaps never clearly determinable - cost our programme dearly ,and subsequent efforts to revive it ,first through ISRO and later by DRDO, for their space and rocket programmes never generated the necessary volumes ,which is a prerequisite ,both for economies of scale ,and for creating the revenues for further investment and research .?????????????????????

10.1- It would be clear from the above writeup that India is an extremely late entrant in the semiconductor industry in a serious manner. The present govt deserves to be complimented for grasping the window of opportunity that has presented itself from 2021 onwards. With the coincidence of fortuitous circumstances such as the enactment of the Chips Act by the US primarily directed at China ,the realisation that fabs manufacturing the most high quality semiconductors in the world are located in a tiny island across the? tension filled Taiwan Strait? facing the threat of invasion ,as also the large-scale disruption of the SoC ( systems- on- chip)international supply chain during 2020-22 because of Covid ,putting the spotlight on India as a promising chip alternative ,it is only appropriate that our Ministry of Electronics &Information Technology ( Meity) should have reacted positively with a package of incentives . Our present initiative is confined to the construction of a fab at Dholera (Gujarat) by Tata Electronics - with technology support from PSMC Taiwan, a second-rung company there - two assembly and testing ventures in Sanand (also Gujarat), and an assembly and testing venture (also through Tatas) in Morigaon (Assam). The fab will produce what is known as "legacy chips" of 28nm to 55nm? which have been in vogue for a couple of decades, but are still relevant to our civilian market and defence / space requirements. It should be made clear that we are nowhere in the class of Taiwan and South Korea, in ultramodern fab construction capable of generating 2nm chips .It is to emphasise this technological backwardness that the phenomenal progress made elsewhere in EUV technology and extremely high precision tool making had been highlighted in earlier paragraphs.

10.2 Today, the Indian chip market is estimated at $ 27 billion ,and estimated to grow to $ 55 billion by 2026 . But the world market is estimated at $ 570 billion and expected to exceed $ 1 trillion by 2030. Here it would be pertinent to mention that China's chip market is already as high as $192 billion ,and they are believed to be getting to ready to invest nearly $150 billion in various packages ,and also in research and development directed towards breaking the US technology blockade .Apart from this challenge is the fact that despite assertions? to the contrary ,our electronic imports from China related to semiconductors seem to be increasing rather than decreasing . While our policies in the years ahead would ,no doubt, address these challenges - even as more and more States (Odisha ,Maharashtra ,UP) seem to be anxious to host semiconductor related projects ,apart from the traditional ones like Karnataka ,TN ,and Andhra Pradesh? - we need to decide clearly which of the three areas ie design, manufacture or assembly & testing we propose to focus on. Undoubtedly design and manufacture is where the money is ,and where leadership in technology is recognised .Design leadership, including that of GPUs (Nvidia) vests in the US ,as does extremely sensitive tool manufacture and software dominance (Cadence ,Synopsis ,Mentor),Lithography with ASML (Holland - also under US influence) ,while advanced cutting edge fabs are with Taiwan ,South Korea and Japan in that order - all of which are strategically aligned to the US .Aspiring for chip independence ,and endowed with enormous technological capability and deep pockets is China .We would probably have to be content with a rapidly expanding, but second-level, capability at best in both design and manufacture in the years ahead .We would need to train our manpower at the best institutions and factories abroad - try and secure associations for our scientists and engineers with factories not only in Taiwan and South Korea ,but with TI and Nvidia in the US ,for instance.

10.3 It needs to be acknowledged that next to the US scientific and technological pool? ,the next largest pool have been highly trained semiconductor scientists and engineers of Chinese origin ,like Morris Chang, Richard Chang, Jensen Huang and others. We did produce a Vinod Dham more than three decades ago ,who played a critical role in Intel in the mid-80s and is credited with being the ' father of the Pentium microprocessor " ,also then? called the " 586" . We need more technology leaders of that calibre to head our effort with full support from govt - on the model of Morris Chang backed to the hilt by the Taiwan govt in building up TSMC in the late '80s . There is ,of course ,the danger of our being caught in a web of cartelization led by the US .This could begin with electronic data automation regulation and payment of hefty licence fees and intellectual property payments ,denial of access to sophisticated tools or in the best lithography equipment ,or even refusal to buy our chips by raising labour law violations or human rights issues .But this " shark infested" sea would have to be navigated courageously if we are to receive the assistance of foreign technology partners.

10.4 At the end of the day ,we need to reflect soberly on the following facts - we had our foot inside the door right from the late '40s when it came to harnessing nuclear power - both for civilian and military uses and we capitalised on it; we had our foot inside the door when it came to space exploration right from the '50s - this led to successes both in the ventures of ISRO and DRDO ; we had our toe in the door in the '70s and '80s in the field of semiconductors ,but tragically frittered away our advantage thereafter. Regardless of the govt in power, this country can now ill afford to slacken its very late initiative to re-enter this field.

Ramesh Narayanaswami, IAS