Can India be a participant within the laptop chip business? | EUROtoday

A dependable provide of laptop chips is crucial for Arnob Roy, the co-founder of Tejas Networks.

His firm, primarily based in Bangalore, India, provides the gear behind cell phone networks and broadband connections.

“Essentially, we provide the electronics that carry traffic across telecom networks,” he says.

That requires particular chips designed for telecoms duties.

“Telecom chips are fundamentally different from consumer or smartphone chips. They handle massive volumes of data coming simultaneously from hundreds of thousands of users.

“These networks can’t go down. Reliability, redundancy and fail-safe operation are essential – the chip structure has to assist that,” Roy says.

Tejas designs many of those chips in India, a country well known for its expertise in designing computer chips (also known as semiconductors).

It’s estimated that 20% of the world’s semiconductor engineers are in India.

“Almost each main international chip firm has its largest or second-largest design centre in India, engaged on cutting-edge merchandise,” says Amitesh Kumar Sinha, Joint Secretary of India’s Ministry of Electronics and Information Technology.

What India lacks is companies that manufacture semiconductors.

So Indian firms like Tejas Neworks design the chips they need in India, but then have them manufactured overseas.

The weakness of that system was exposed during Covid, when the supply of chips dried up and companies in all sorts of industries had to scale back production.

“The pandemic made it clear that semiconductor manufacturing is simply too concentrated globally, and that focus carries critical danger,” Roy says.

That spurred India to develop its own semiconductor industry.

“Covid confirmed us how fragile international provide chains could be. If one a part of the world shuts down, electronics manufacturing all over the place is disrupted,” says Sinha.

“That’s why India is creating its personal semiconductor ecosystem to cut back danger and enhance resilience,” he adds.

He is leading government efforts to develop the semiconductor industry, which involves identifying parts of the production process where India can compete.

There are several steps in making a computer chip. First design, where India is already strong.

The second stage is wafer fabrication, where thin sheets of silicon have circuits etched on to them by extremely expensive machines in huge factories known as semiconductor “fabs”.

That part of the process, particularly for the most sophisticated chips, is dominated by companies in Taiwan, with China trying to catch up.

In the third stage those large silicon wafers are sliced up into individual chips, packaged in protective casing, connected to contacts and tested.

That third stage, known as Outsourced Semiconductor Assembly and Test (Osat), is the part of the production process targeted by India.

“Assembly, check and packaging are simpler to start out than fabs and that’s the place India is transferring first,” says Ashok Chandak, president of India Electronics and Semiconductor Association (IESA).

He says that several such plants will “enter mass manufacturing” this 12 months.

Founded in 2023, Kaynes Semicon is the first company to get a semiconductor plant up and running with support from the Indian government.

Kaynes Semicon invested $260m (£270m) in a factory to assemble and test computer chips in the northwestern state of Gujarat. Production started in November of last year.

“Packaging isn’t just placing a chip in a field. It’s a ten to 12 step manufacturing course of,” says Raghu Panicker, CEO of Kaynes Semicon.

“That’s why packaging and testing are as essential as making the chip itself with out this stage, the wafer is ineffective to business.”

His facility will not be making the most advanced computer chips found in the latest mobile phones or used for training AI.

“India doesn’t want probably the most advanced datacentre or AI chips on day one. That is just not the place our demand is, and that’s not the place our power lies in the present day,” Panicker says.

Instead, they will be the kind of chips used in cars, telecoms and the defence industry.

“These are usually not glamorous chips, however they’re economically and strategically way more vital for India. You construct an business by first serving your personal market. Complexity can come later. Scale has to return first,” he provides.

It’s been a steep learning curve for Kaynes Semicon.

“We had by no means constructed a semiconductor cleanroom in India earlier than. We had by no means put in this gear earlier than. We had by no means educated folks for this earlier than,” Panicker says.

“Semiconductors demand a degree of self-discipline, documentation and course of management that could be very totally different from conventional manufacturing. That cultural shift is as vital because the technical one.”

Getting staff trained has been a huge challenge.

“Training takes time. You can’t shortcut 5 years of expertise into six months. That is the only greatest bottleneck,” Panicker says.

Back in Bangalore, at Tejas Networks, Arnob Roy is looking forward to buying more locally-sourced tech.

“Over the subsequent decade, we count on a major semiconductor manufacturing base to emerge in India and that may instantly assist corporations like ours.”

It’s the start of a long journey, he says.

“I do see Indian corporations ultimately designing and manufacturing full telecom chipsets however it’ll take affected person capital and time.

“Deep-tech products take longer to mature, and India is only now beginning to support that kind of investment.”