Expect 2-6 high-quality proposals on semiconductors in 12 months: Vaishnaw

A day after the India-US joint statement and the announcing of big projects by US companies such as Micron, Applied Materials, and Lam Research, Communications Minister Ashwini Vaishnaw, in an interview with Surajeet Das Gupta, explains how they will give a big push to the country’s ambitious semiconductor plans.

What does the series of deals with Micron, Applied Materials, and Lam Research mean for India’s semiconductor vision?

The focus of Prime Minister Narendra Modi is to create a semiconductor ecosystem. The announcements are a reflection of that. First we got Micron, which is among the leading global players in semiconductors. Then we signed up the largest semiconductor equipment manufacturer in the world in applied materials and roped in Lam Research to train our 60,000-odd engineers in the country, with the first training in collaboration with IISC Bangalore.

In parallel, each and every company in the fields of gas and chemicals globally has been documented and we have met them. Full detailing has been done and shared with the industry. About 250 chemicals and gases go into making semiconductors. So we have done our homework. We are meeting on Friday the founder of Synopsys, which makes the most advanced tools for the silicon chip design. This company too will come to India.

What is the scope of the Micron deal?

Memory chips are used in mobiles, vehicles, laptops, servers, etc. The company will be manufacturing memory chips in India with eight different lines of production. It will import only the wafer.

Are you talking to the company on setting up fab plants also?

That is quite likely. It has large volumes, so once the ecosystem develops, it is most likely to set up its fab unit.

Will Applied Materials also manufacture equipment for the semiconductor industry in India?

Applied Materials is investing $300 million and will design and develop the supply chain for components in India. It will make the machines in India and we believe it will be a major centre for it globally.

How much homework has been done to get these projects off the ground?

A lot. In the case of Micron, land has been allocated in Gujarat. Most of the approvals have been secured, and the advance-pricing agreement with the government has been completed (as it will import wafers from its own fabs and re-export chips back). Transfer pricing within the same group has to be clearly defined.

What kind of value addition do you expect once it starts working at full capacity?

We expect a value addition of Rs 1 billion a year once the plant is operational. In six quarters from now, it will make the first “made in India” chip.

In the case of Applied Materials, land has been identified near Bengaluru, and the construction design has been done. It will be the global base.

There were expectations that a deal on a fab plant would be announced, especially that of Foxconn-Vedanta. However, what we saw was a change in the scheme. What happened?

We have made changes in the semiconductor programme after getting inputs from experts. So the final application has to be based on the changes. We have asked all the three applicants to revise their proposals. They can find a new tech partner, change the nodes they want to make, and have the option to focus on gallium nitrate nodes or stick to silicon.

What you have done is to keep the window open for new players till the end of 2024 instead of the 45-day limit earlier? So how will you evaluate it now?

We will do a concurrent evaluation. In the initial stages, experts asked us to give them a set of applications so that they can evaluate. So we had a limited time frame. Now the India Semiconductor Mission is fully functional and hence a concurrent evaluation. We expect in 12 months two-six high-quality proposals in semiconductors. And we should be able to clear two-three.

Is there an interest from Indian players apart from the Tatas?

Yes. They are looking at technology partners as well as those in manufacturing.

In many you have changed the focus of the semiconductor policy from 28 nanometres (nm) and below to the high-volume legacy nodes above 40 nm. Why so?

Yes, we have tweaked our earlier policy. We are now looking at the complete spectrum. Two years ago, there was competition among fabs to build smaller and smaller nodes. But now they are talking about mature nodes. Currently 55 per cent of chip demand is for mature nodes and this can go up to 60 per cent with the growth of electric vehicles and the telecom industry.