“The question should not be whether or not we should have a fab, but how soon can we have a semiconductor fab. Should it be set up using the funding by private players, or should the government play a role, or should it a mix of both are the right questions to ask!”
Krishnan Shrinivasan, Vice President and Managing Director at Lam Research India in an exclusive interaction with Electronics For U’s Mukul Yudhveer Singh spoke about whether India should invest in a semiconductor fab or not. He has been associated with Lam Research for the past 25 years.
Excerpts from the interaction
Que – What is Lam Research all about? What’s the role of its India office?
Ans – Lam Research is a 40-year-old company that manufactures equipment used for semiconductor manufacturing. We make equipment for many all major semiconductor manufacturers. Lam Research is an industry leader in two broad domains, namely etching, and deposition.
At Lam India, we provide design engineering that is necessary to bring the semiconductor equipment that we manufacture to life. We perform software engineering for these machines in India. Control software coding and testing are done at Lam India. The other big chunk of activity at Lam India is hardware design. The procurement of materials and spares needed to build and support these machines is also taken care of by the Lam India office. We currently employ around 1000 full-time employees in the country.
Que – When did Lam Research set up an office in India?
Ans – We are celebrating 20 years of operations in India this year. Lam’s first office in India was set up in 2001. We originally started as a software engineering operations company in Bangalore. Then in 2007-08, we began hardware engineering in the country.
Ever since its inception, Lam has continued to make investments in India. The semiconductor equipment industry employs technically trained manpower in sophisticated engineering and operations roles and Lam has found ready access to talent in India.
Que – What interested Lam Research to set up an office here?
Ans – India has a very large enabling technological ecosystem. The prioritization of technological education is also a very huge advantage that the country has. The political stability of the country is a big plus. India also has a modern judicial system that helps enforce contracts. The country is also well connected to the west through language and culture.
Lam Research treasures the collaborative culture that the country offers. Individuals here tend to be collaborative and work well as a part of teams that enable technological success.
Que – Any plans for starting manufacturing in India?
Ans – Lam recently announced a new factory located in Malaysia. At the moment we are completely focused on bringing up this Malaysia factory to serve our customers in Asia.
At this moment, the ecosystem required to manufacture semiconductor equipment does not exist in India. This ecosystem ideally is inclusive of material suppliers, material availability, availability of technology, and support. None of these are presently available in India. The ecosystem can be developed in India, but as it does not exist at the present, we found it to be more productive for us to go ahead with our factory in Malaysia.
Que – Does India require a private semiconductor fab?
Ans – Not just India, I think every major economy should have access to a spectrum of technology. The question should not be whether or not we should have a fab, but how soon can we have a semiconductor fab. Should it be set up with funding from private players, or should the government play a role, or should it a mix of both are the right questions to ask!
The Chandigarh fab operated by the government agencies is proof that capabilities exist in India. After the capability comes the question of economic benefit, and unless the answer to this question is clear and favorable, private players may not be interested in investing in a semiconductor fab. The good news is that a lot of multinational companies have started to come to India to assemble their electronic products here.
I think that it is just a matter of time before India moves up the value chain in terms of electronics manufacturing. The journey may move from assembly to manufacturing circuit boards, and then to manufacturing components, but it is just a matter of time. Once we do that it will become attractive for a lot of big players to set shop in India.
Que – When should India have a semiconductor fab?
Ans – It’s not a well-known fact that India amongst various Asian nations had one of the earliest semiconductor fabs. The Chandigarh fab was a result of those early semiconductor fab efforts in the country.
I wish that we move fast now because many important aspects of the semiconductor ecosystem outside of an actual fab already exist in India. The biggest proof of this is that every big chip manufacturing company in the world has a technical office in India. Then there are a good number of startups designing chips in India that have the potential to go global. To top it all we have a very large base of consumers in the country. If we just take the example of smartphones, there are hundreds of millions of consumers waiting to upgrade to their first smartphone.
Then we have a very large consumption of electronics in other areas such as defense, aerospace, and space industries that use a lot of semiconductors. Most importantly the levels of human talent available in the country are excellent. The number of Indians working in the semiconductor industry can astonish anyone. Expatriate Indians are associated with top semiconductor and technology companies as CEOs, CTOs, and in many other critical managerial and technological roles.
Ultimately these trends that include the availability of human talent, the consumption pattern, and the level of excellent technical education in India are enablers required for setting up a fab in India.
Que – Despite all the strong pointers, why does India keep missing the bus of setting up a semiconductor fab here?
Ans – I think what is lacking is an honest effort to bring all of India’s advantages together. We need to integrate all input factors in a way that makes a compelling economic case. Whether it is land availability, power availability, access to ports or availability of high-quality chemicals, availability of reliable labor, all these need to be coordinated in a way that major players find it to be economically compelling to make semiconductors in India.
Today, it is very easy to go to Taiwan or any other hub and get semiconductors manufactured from a design, even for a lot of startups in India that are already designing semiconductors here. It seems to me that Government policies should try to bring together various stakeholders in a compelling manner. The investments required to set up a modern fab are so huge that private players might not be ready to invest. In such cases, the government might have to intervene, encourage, and offer as much help as possible.
We have heard that the government has taken a lot of these positions into consideration and is trying to draft the right policies to encourage private semiconductor companies to set up a fab in the country. It’s been heartening to see that the government is taking these steps even during this pandemic.
Que – Why should India have a fab?
Ans – India, in every technology and vertical except electronics has a very significant presence. India is among the leaders in many other scientific domains such as medical technology, software engineering, etc. However, when it comes to electronics, we have not been able to make our presence count. If you look at China and carefully assess what the country did, you will find that they took calculated moves in response to a large electronics import bill, and have worked on making themselves self-sufficient in terms of electronics.
The Indian Semiconductor Association, 12 years ago, had published a study pointing out that the import bill for electronics was going to exceed that for petroleum in India. At some point, we might land up with a trade deficit in the hundreds of billions of dollars in terms of semiconductors.
Being dependent on the outside for something as strategic as semiconductors is not probably a good idea. An economy that is as aspirational and as large as India’s should have the access to a spectrum of leading technologies. Semiconductors are now a very valuable and critical component in the broader economy. We should focus on semiconductors not just because we want to be self-reliant in terms of semiconductor technology, but because it could help us have access to a spectrum of technologies.
Que – You mentioned political stability as one of the biggest advantages of India, do you think the country can become the hub of semiconductor manufacturing?
Ans – A lot of the demand that growth in Asia generated already has existing suppliers. We might not be able to get very far by trying to replace existing suppliers of semiconductors. I must add here that the likes of Taiwan, Japan, Korea, and China are meeting semiconductor demands quite successfully.
What I think we could do probably better in India is generate a whole new range of applications for semiconductors. The country has a unique set of opportunities. Millions of Indians are transitioning from a farm-based economy to an urban-based economy. The problems during this transition are going to be both a challenge and an opportunity. Technology will play a big role in charting out solutions for these problems.
The best part is that once these solutions are available, they will have applications in a lot of other parts of the world. I see the continent of Africa and Latin America as two of the biggest examples. Some of the examples of solutions are solutions in terms of agriculture, weather forecasting, and communication.
Instead of replacing current leaders in terms of semiconductors, we should try and find solutions to newer problems, and then proliferate them to the rest of the world.
Que – What technology-based semiconductor fab do you think India should look at under the present circumstances?
Ans – That’s a very difficult question to answer. Instead of looking at what technology a country should start in terms of a semiconductor fab, it should look at what applications it wants to focus on. In my 25-year journey with Lam, I have experienced the progression of the semiconductor industry from 250 nm technology to 5 nm technology.
What we at Lam have recently discovered is that our customers are repurposing older semiconductor technologies for new applications. For example, if you are building an IoT device it generally does not require cutting-edge technology. In practicality, an IoT sensor for assessing the quality of water in a lake or a pond would not require 5 nm solutions. These can be developed using older technology.
It must be the application that should drive the technology that should be adopted and hence the kind of investments that are needed. Setting up leading edge 5 nm fabs can be very expensive and technically daunting! So, instead of dictating that we should go for a particular technology node, what we should look for is the kind of applications we want to build.
