Why the "Chips" are down in India?

Trying to find the latest upgrade for my laptop, turned out to be an eye opener. The only thing I could do was upgrade my RAM and hoped all would go fine. The cost for an upgrade, this time to a more high-performance based gaming laptop would set me back by a cool $2500 to $5000 dollars. I am talking about the ROG Series, Legion, Predator, Alienware and Raider laptops.

While writing this article, I have to confess, I was blown away by the ROG Zephyrus Duo 16 but more of that later. Watch this video at your own risk.

My quest was not to buy this laptop but to ask, could India be able to make the entire range of high-performance laptops with home grown technology right from chip design, to fabrication, testing etc. Maybe in the near future, at least I hope but for now, progress is slow and quiet.

I also wanted to know that while India has missed the bus and will always be playing catch-up for decades, did we miss an opportunity much before the topic started trending on all of our social media feeds? I am talking about the 70s and the 80’s. If we did conjure up the idea of the IITs and then landed setting them up, much to our relief, then surely, we would have at least thought about Semiconductors and Chip Manufacturing. Right?

How did we miss the bus just like the countless we keep on missing?

Turns out that early on, post-independence, as per the Observer Research Foundation, India’s emphasis was focused on building a “scientific temper”, meaning, developing an innate understanding of the technologies being used, rather than technology being deployed for its own sake.

There is a powerful statement that the then US Ambassador, Stephen Grady made that will anger a lot of us even today :

“Indian friends seemed to think American know-how can be shipped to them in sealed cases laid down at Indian ports”

This was quite a hard-hitting statement. Not to be deterred though India did set up the Semiconductor Complex Limited (SCL Ltd) in the 1980’s manufacturing low-grade low-tech chips which did not make any dent in the world but was still a step towards the quest.

To do the math, this was 40+ years ago and it weren’t for a fire that devasted the facility, I am confident that India would have made some headway in the Chip Industrial Chain. Just so you all know, this "fire" incident remains a subject for much speculation and could have been planned. But lets not digress.

What also rang the death knell for chip manufacturing was the economic liberalization policies of the 1991’s that allowed the easy entry of semiconductor imports. Ironical isn’t it?

While the influx of imported chips grew steadily, the government of India failed to provide subsidies, infrastructure, utilities like water and electricity for setting up facilities in India. India hence had to import.

In 2007, the government again tried to woo international investments from companies like AMD and Intel to set up Fabrication facilities but as usual, the delay in passing of the Semiconductor Policy, strict minimum investment requirement, amongst other factors played a significant role for its failure. Another attempt in the year 2013-14 collapsed too.

I am thinking that the title of this article should now be “a series of unfortunate incidents” especially after I found out that the Foxconn - Vedanta deal was called off too.

However, all in not lost and while the government has taken a few decades to realize what should have taken a few years, some initial progress has finally started to take shape. Take for example the MoU between Japan and India on collaboration for chip manufacturing right from Design, Manufacturing, Research and Talent Development. This follows the MoU signed between India and the US a while ago.

Now as I write this article, India is hosting the Semicon India Conference, 2023 with the sole aim to make India a global hub for Semiconductor Design, Manufacturing and Technology Development. The conference will see participation from Semiconductor leaders like Micron, Foxconn, Applied Materials, AMD, IBM, to name a few.

Under this Semicon Program, the Cabinet has approved an outlay of INR 76,000 crore, or roughly $10 billion, for the development of a sustainable semiconductor and display ecosystem in India with the following core objectives :

1. Strategy : Formulation of a comprehensive long-term strategy for developing semiconductors & display manufacturing facilities and semiconductor design ecosystem in the country in consultation with Government ministries / departments / agencies, industry, and academia.
2. Supply Chain : Facilitation in the adoption of trusted electronics through secure semiconductors and display supply chain, including raw materials, specialty chemicals, gases, and manufacturing equipment.
3. Design and Start-Up : Enabling a multi-fold growth of Indian semiconductor design industry by providing requisite support in the form of Electronic Design Automation (EDA) tools, foundry services and other suitable mechanisms for early-stage start-ups.
4. Intellectual Property : Promoting indigenous Intellectual Property (IP) generation and encourage, enable and incentivize Transfer of Technologies (ToT).
5. Partnership : Enabling collaborations and partnership programs with national and international agencies, industries and institutions for catalysing collaborative research, commercialization and skill development.

I am hoping that India has formulated a robust Semiconductor Policy now and will also see swift developments in infrastructure and utilities like power, water and connectivity. And while India has made good progress in these areas, we also have climbed to the 63rd position in terms of doing business. For one of the most powerful economies of the world, this ranking has to improve substantially especially when China is sitting at the 31st position, Russia at 28th with United States at 6th.

Its interesting to note that India does well in the area of Chip Design and now with the promise of fabrication of chips with these latest developments, I hope the next microchip powering the kind of laptops I use, will be "Made in India".

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