India’s semiconductor ambitions will be led by large players like Tata group: Raja Manickam

India should not depend on multinational companies to pursue its ambitions to become a hub for semiconductor manufacturing but should encourage local players to take the lead, according to Raja Manickam, Chief Executive Oficer, TATA Outsourced Semiconductor Assembly and Test (OSAT).

Speaking at a businessline exclusive roundtable on the sidelines of the Nasscom Technology and Leadership Forum, Manickam said, “ I don’t think we should wait for MNCs to give us some commitment for wafers or even commitment for packaging. We need to create our own ‘MediaTeks’ ( Taiwan-based semiconductor company) in India. This is where large Indian companies like the Tatas will play a role. The capital requirement and the cost of capital is very high in India so it requires a long runway and patient capital. It will be difficult for any small players to get into this.”

Anand Ramamoorthy, MD, Micron India said that large Indian players alone will not be able to drive the ecosystem play. “Semiconductor manufacturing is a very ecosystem-led play and all of us will agree that it’s not just about the intent of one large player to go and set something up. The entire ecosystem has to come together, which is where the MNCs have a small advantage because they have a well-entrenched ecosystem of suppliers already feeding into them. They have the ability to go and possibly influence and nurture, and or nudge people to go set up an ecosystem in a different site. I think it’s going to be a mix of both local players and some MNCS feeding into the manufacturing story in India.”

Jitendra Chaddah, VP, Country Head India, GlobalFoundries said although his company has no plans to invest in setting up a greenfield manufacturing unit in India, they are willing to share technology with serious players. “There is a lot of technological know-how which GlobalFoundries has, which we can share through a partnership with a credible partner.”

While India has been trying to get investments into semiconductor manufacturing for several decades, it has had limited success so far. The Government has recently announced a $10 billion scheme to attract investors. While players like Vedanta and Tatas have announced plans to set up semiconductor manufacturing there are still concerns over the feasibility of such a project. The recent challenges around the supply of chipsets and the geopolitical developments in China are, however, helping India make its case as an alternative manufacturing destination.

K S Viswanathan - Vice President (Industry Initiatives), Nasscom said that the industry body can take the initiative to bring the ecosystem together which will help in driving the demand for the locally made chipset. “I would call this India’s Y2K moment of the year recreated in 2023. We are talking to many stakeholders to get the ecosystem together. We want to get the India technology status in semiconductors as we did in IT services.”

When asked if the $10 billion amount is too low for a capital-intensive sector like semiconductors, Viswanathan said “I don’t think the government has said $10 billion will remain forever. It is just a starting point. The expectation is the initial seed investment of $10 billion will have a multiplier effect.”

Karthikeyan Natarajan – Executive Director & COO, Cyeint said India should focus on the kind of nodes that are going to be manufactured. “While you can do a lot of things on higher nodes, I think unless we start getting into the seven nanometers and less I think we are not going to be as competitive. I think that is going to be an important element for India to look at for the next 10 years. We will have to start looking at the lower nanometer node to really bring the competitiveness at the global scale.”