“India Has Significant Demand, So Why Not Produce Indian Chips?”

- Advertisement -

From Tata to Tech Trailblazer: Raja Manickam’s blueprint is for turning India into a global semiconductor leader through local innovation and talent

Raja Manickam, touted as one of the brains behind Tata Group’s semiconductor foray, parted ways with the group early this year. He is now busy setting up a fabless semiconductor company in India and focusing on “creating demand in the country.”

He says, “I am confident that in five years, India will be a major player in exporting electronics, including inverters and EV chargers. The Indian companies I am collaborating with today will be the ones propelling me onto the global stage in five years.”

- Advertisement -

Additionally, he believes that Indian companies are always Tier III for semiconductor “big boys.” At his newly minted enterprise, IVP Semiconductor, Indian companies will always maintain their place as Tier I partners. Interesting excerpts from the interaction with Raja Manickam:

Q. Why did Raja Manickam part ways with Tata Group?

A. Tata is an excellent company to work with. They have grand plans, and I accomplished what I set out to achieve when I joined them. I was among the first few individuals to conceptualise Tata’s semiconductor plans. There came a time when I wanted to contribute more to India’s semiconductor mission from an external perspective. I have always been an entrepreneur and have a penchant for expeditious action. I firmly believe in creating opportunities for others.

In that sense, I established opportunities and raised awareness for the Tata Group, which is now primarily focused on execution. I am also actively involved in other semiconductor projects in India now.

Q. Apart from these projects, what else are you doing now?

A. I am concentrating on stimulating demand for what we ‘Make in India.’ The dialogue has largely revolved around ‘Making Semiconductors in India,’ but someone needs to address the demand side of the equation. I have taken it upon myself because once there’s sufficient demand, manufacturing will naturally follow. My current mission is to generate that demand.

Q. How will you approach this?

A. There are several facets to it. I am establishing a new fabless chip company that focuses on the power market. These are fundamental and essential analogue components required for a broad range of applications, including solar, renewables, EVs, consumer electronics, IoT, and all things power-related.

To put it simply, I’m compiling a catalogue of essential products and solutions. These core offerings will underpin India’s transition from fossil fuels to clean energy.

Q. Isn’t the demand already there?

A. While there is indeed demand, it currently represents only a fraction of what it will be in the years to come. Furthermore, this demand is currently being met by major international players located outside India. My standpoint is that I am an Indian company, and India has significant demand, so why not produce Indian chips?

From a philosophical perspective, we’ve seen that the Chinese prefer Chinese products, Europeans opt for European offerings, and so on, as long as the capabilities are present. I don’t see any reason India should be different.

Q. So, will your new company create this demand?

A. Yes and no. We will officially unveil our new company in December this year. Named IVP Semiconductor, it has already initiated discussions with several companies and even sent out catalogues. IVP will operate in a manner akin to TI, NXP, STMicroelectronics, or OnSemi. My company will propose the inclusion of my chips in their overall product designs. These chips will require manufacturing, and I hope IVP can partner with firms like Tata, CDIL, and Kaynes for packaging.

Once we reach a certain threshold, semiconductor fabs will follow. Currently, I will need to procure wafers from Taiwan and Japan. In this way, I’ve stimulated demand for chips made in India and for local wafer fabrication.

Q. Will white labelling be a part of your plan?

A. If you take a product and rebrand it as your own, there’s no substantial value added. It essentially becomes a trading business. Most OSATs (outsourced semiconductor assembly and test) will not entertain this approach because customers won’t allow you to apply their solutions with your brand name.

Some entities that lack a presence in India might permit this with the condition of receiving royalties. I don’t perceive this as a viable long-term business model.

Q. Are Indian companies open to purchasing chips from another Indian company? Are there potential concerns about ‘quality and price’?

A. My fundamental philosophy revolves around being a semiconductor specialist. I’ve been involved in this domain multiple times, learning not only what to do but also what to avoid. We’ve established the groundwork for how global giants like Foxconn and Tata source components.

The most effective way to guarantee quality is through rigorous testing, and I am first and foremost a test engineer. When we deliver components, they will be of the highest quality. Our unique selling point lies in our testing capabilities. As for price, IVP won’t merely supply components but will consistently work on cost reduction. Initially, operating with slim margins will be our primary strategy. As our operations expand in India, cost advantages will become more pronounced.

Q. Why should Indian companies choose you over the big boys?

A. Our exclusive focus is on the Indian market. While we won’t directly compete with Infineon, STMicroelectronics, or NXP, we acknowledge that most Indian customers currently occupy Tier III positions with these giants.

To us, these Indian customers will be Tier I. We intend to build strong partnerships with our customers, providing better support than what these large corporations typically offer in terms of application and system support. IVP will contribute to the overall design of the product/solution and reduce development costs.

Q. Will the industry giants allow you to carve out your share in the market?

A. A valid question! Many of these industry giants were my clients during my tenure at Tessolve. I understand their operations, and many have begun recognising India as a substantial market. We are fully aware that we must create a compelling value proposition to establish a foothold in India.

Moreover, as we are exclusively targeting the Indian market, there will be a loss of cost advantages associated with our competitors. Our cost-effectiveness will rise as semiconductor fabs begin to emerge in India. We are also open to collaborating with individuals and institutions. I have a deep understanding of how the industry giants function.

I’m not concerned about competition, which is why we’re venturing into this sector in India. Our primary objective is to capture market share initially. There’s no business where you start turning a profit from day one.

Q. What if one of these big boys proposes an acquisition of IVP??

A. My objective is to establish a local company. If one of these industry giants approaches us to become their Indian arm, we would entertain the discussion. I firmly believe that in five years, India will emerge as an export hub for various electronic products such as inverters and EV chargers.

The Indian companies I am collaborating with today are the ones that will catapult me onto the global stage five years from now. This is when the industry giants intend to set up manufacturing facilities in India, much like in China. Hence, it is imperative to create demand in India.

Q. What level of investment do you anticipate for IVP Semiconductor?

A. Initially, we’re looking at an investment ranging from $20 to $25 million. Some of my close associates are part of the founding team. We’ve collectively committed $5 million to the company. The remainder will be raised, and the advantage we have is that due to my prior ventures, we don’t need to actively seek potential investors this time.

In fact, we have a surplus of investors eager to participate in IVP. We’ll make that decision thoughtfully and progressively. The potential for an Indian fabless chip company is crystal clear in their minds. This might also eventually contribute to establishing a fabrication facility!

- Advertisement -

Most Popular Articles

Mukul Yudhveer Singh
Mukul Yudhveer Singh
Mukul Yudhveer Singh is an Editor at EFY. He’s an experienced business journalist who is both an enthusiast and a cynic of technology. Believes in data, as well as hunch-based journalism. He defines journalism as- reporting facts which help the audience take their own decisions, not ones that influence them!

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

Exclusive

Electric 2-Wheelers May Cost Less Than ICE Models in 4-5 Years: Report

0
In a scenario where a subsidy of ₹15,000 per kWh is provided, it is anticipated that the upfront cost parity for short- and mid-range...

Thoughtworks And AWS Unveil SDV Pulse For Industry Megatrend Navigation

0
Global technology consultancy and Amazon Web Services have released their first annual report, designed to assist automakers in quickly maximizing the potential of software-defined...

EV Sales in India jumped 21% in H1 2024

0
As per JMK Research, electric vehicle sales in India hit a notable 927,097 units in the first half of this year, with the E2W...

Buzz

Continental Targets India’s Two-Wheeler Market With ARAS Safety Tech

0
The German Tier-1 major is currently negotiating with two leading Indian two-wheeler OEMs, aiming to integrate its radar-based advanced rider assistance systems into both...

India, Russia Partners To Boost India’s Defence Capabilities

0
Backed by Russia, HAL aims to produce and export Sukhoi Su-30 fighter jets in Nashik to enhance India's aerospace prowess and export potential. India's state-owned...

Electric 2-Wheelers May Cost Less Than ICE Models in 4-5 Years: Report

0
In a scenario where a subsidy of ₹15,000 per kWh is provided, it is anticipated that the upfront cost parity for short- and mid-range...

Important Sectors

Continental Targets India’s Two-Wheeler Market With ARAS Safety Tech

0
The German Tier-1 major is currently negotiating with two leading Indian two-wheeler OEMs, aiming to integrate its radar-based advanced rider assistance systems into both...

India, Russia Partners To Boost India’s Defence Capabilities

0
Backed by Russia, HAL aims to produce and export Sukhoi Su-30 fighter jets in Nashik to enhance India's aerospace prowess and export potential. India's state-owned...

Electric 2-Wheelers May Cost Less Than ICE Models in 4-5 Years: Report

0
In a scenario where a subsidy of ₹15,000 per kWh is provided, it is anticipated that the upfront cost parity for short- and mid-range...

Germany Likely To Abstain On EU China EV Tariffs Vote

0
The proposal might be hindered if a qualified majority of the European Union's 27 members oppose it. For a qualified majority, at least 15...

Zapp And Bounce Infinity Partner On Scooter Production at Bhiwadi Plant

0
The partnership will facilitate the manufacturing and distribution of Zapp's i300 electric urban motorcycles across India. Zapp Electric Vehicles Group Limited has unveiled a strategic...

Manufacturing

India, Russia Partners To Boost India’s Defence Capabilities

0
Backed by Russia, HAL aims to produce and export Sukhoi Su-30 fighter jets in Nashik to enhance India's aerospace prowess and export potential. India's state-owned...

Zapp And Bounce Infinity Partner On Scooter Production at Bhiwadi Plant

0
The partnership will facilitate the manufacturing and distribution of Zapp's i300 electric urban motorcycles across India. Zapp Electric Vehicles Group Limited has unveiled a strategic...

Empowering Innovation: The Role of MSMEs in India’s Defence Sector

0
If large industries are the “face” of the Indian economy as they provide the most visible aspect, then the MSMEs are surely the “firm...

Quality Control With AI-Driven Optical Inspection

0
This collaboration combines optical inspection technology with high-performance Edge AI hardware, significantly improving printed circuit board assembly efficiency, reducing waste, and enhancing overall process...

River Mobility To Invest INR 1,000 cr In New EV Plant

0
River Mobility is gearing up to invest in the automotive industry with a new INR 1,000 crore plant in Telangana, strategic expansions, and robust...