India’s Chip Industry Booming After Overcoming Fire and Red Tape
Micron Technology, a leading memory chip manufacturer from the US, has entered into a Memorandum of Understanding (MoU) with the government of Gujarat. This partnership is being hailed as a major milestone for India’s semiconductor sector.
Micron, which has signed a memorandum of understanding to build a $2.75 billion semiconductor assembly and test facility, said last week it plans to hire 5,000 workers and create an additional 15,000 jobs over the next five years.
In addition to the details of Micron’s plans, there were two other major semiconductor announcements involving Applied Materials and Lam Research. But Micron’s signing of the MoU with the state government is now being seen as the first step towards manufacturing Atmanirbhar’s memory chip.
India waited a long time to witness this milestone. It originated from Semiconductor Complex Limited (SCL), a state-owned semiconductor manufacturing foundry in Mohali since 1976.
SCL was initially successful and produced several chips for the Indian market. However, in 1989, a fire broke out at SCL’s plant, which destroyed a large part of the factory.
Although intelligence agency officials visited SCL to find out the cause of the horrific incident, no clear information was given about the cause of the fire.
SCL was able to restart production in 1997, but the plant was outdated and unable to compete with more efficient plants (factories) in other countries. Later, in 2006, it was renamed the Semi-Conductor Laboratory.
But it’s hard to ignore that the fire was a devastating setback for India’s semiconductor manufacturing operations. Separately, it is believed that SCL has faced several bureaucratic obstacles throughout its history. For example, it was difficult to get approval for new projects.
In addition, SCL did not receive the support it needed from the government. In addition, there was a shortage of skilled labor needed to support a booming semiconductor industry that needed initiatives to grow talent, unexpected policy changes that first came in 2007, and higher taxes on imported semiconductor wafers.
All this made it difficult for SCL to plan for the future, compete with foreign companies and slow down its growth. However, SCL is currently conducting research and development work in the field of microelectronics to achieve the country’s strategic goals.
The government has decided to invest in this facility to modernize it. In May, it was reported that the center would invest $2 billion in SCL for research and prototyping.
However, the need to become a chip center was felt during the pandemic, when the requirements grew enormously. The government then launched an Indian semiconductor operation.
Since then, many companies have held negotiations with the government and changes have been made to the program based on the demand of each sector. So it’s no longer about making high-end chips, although in that case Taiwan’s TSMC is the undisputed leader.
It is now believed that almost half of the semiconductor sector will be mature nodes, while the rest of the industry will focus on smaller and high-end nodes.
Since the center has asked applicants to change their designs and resubmit them, the Vedanta-Foxconn JV apparently submitted a new proposal based on new guidelines for making simpler and cheaper 40-nanometer chips.
Although India’s semiconductor dream has taken a long time to materialize, with the right policies, measures to increase the talent pool and the participation of private giants, the goal of a manufacturing hub can be achieved.
