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EE|Times EUROPE 49

SPECIAL REPORT: INDIA
Is India Ready for the Next Chip Wave?

By Faisal Kawoosa

ndustry, government, and other stakeholders in
India are cognizant of the electronics industry’s
potential not only to strengthen the country’s
Ipresence on the global stage but also to advance
technology in other domains for the greater
societal and economic good. Fully exploiting that
potential, however, has proved elusive.
New efforts in electronics are unfolding against
a backdrop of haphazard economic development in
India. Growth initiatives have been skewed toward
the country’s urban centers, even as the majority
of the population remains rural (about 66.46%,
according to the World Bank), meaning that a large
percentage of the populace does not see the full
benefi ts of investment and development. For too many, access to qual- that are exported out of India and then consumed via products or
ity infrastructure, education, and health care is a dream unfulfi lled. components imported into the country. The entire Make in India
Since 2010, there has been a focus on the role that technology, and program, including the phased manufacturing-program roadmap for
especially electronics, can play in harmonizing growth across India. For components, mainly promotes assembly of electronic systems and
the chip industry in particular, four pillars of growth have been identi- components and has done little to foster homegrown manufacturing-
fi ed an enabling and visionary policy regime, world-class infrastructure and engineering-level companies.
capable of creating world-class products and services, access to adequate Industry has voiced two primary concerns with respect to imple-
and easy funding to propel growth, and a deep talent pool with the mentation of the policy. First, setting up a business under the single
proper training to develop intellectual-prop- policy objective is a time-consuming process that can take years to
erty (IP) and knowledge repositories. implement in a tangible form. Second, the bureaucratic procedures and
The government’s National Policy on strict guidelines that need to be followed strip risk out of the process
Electronics (NPE) 2012 laid out a formal but leave decision-makers too little leeway for discretionary, creative
foundation for growth in the sector. The problem-solving.
recently announced NPE 201 is funda- While positive overall about the policy, aswinder Ahuja, corporate
mentally aligned with the earlier policy but vice president and managing director at Cadence Design Systems India,
adds initiatives to promote exports out of said that the country still lags in the implementation and time to
India as well as enable the requisite vol- execute.
Faisal Kawoosa umes to give companies the justifi cation to P. .G. Menon, president and CEO of ANN Consulting and former
establish operations in the country. Those president of the India Electronics and Semiconductor Association, took
goals apply to the entire electronics industry, not just the chip sector. issue with the one-size-fi ts-all approach. “The implementation of the
Since the policy framework was created in 2012, government initia- policy has to be tailor-made for the vertical,” Menon said. “We cannot
tives have included establishment of incubation centers for product look at each vertical with the same vision.”
and IP development, modifi ed special incentive packages (M-SIPs) to
attract investments in the sector, creation of an electronics devel- THE FAB QUESTION
opment fund (EDF) to enable more risk-taking and provide funds for The three weak links in India’s chip industry — semiconductor fabs,
R&D, establishment of manufacturing clusters, and funding for Ph.D. incubation centers, and manufacturing clusters — are at different levels
programs in electronic-systems design and manufacturing. In addition, of progress.
a preferential market access (PMA) policy was invoked in February The house is still divided on whether India should have its own
2012 to promote the procurement of domestically sourced electron- fab. Those who argue in favor of a fab presence cite emotional as well
ics for use in security-related products and by government agencies. as strategic reasons. Ahuja comes down on the side of a domestic
Around the same time, the government also approved plans to build fab but has suggested that 28 nm might be the most economically
two fabs in India, and a couple of global players expressed their intent viable technology node for such a facility. Not only would it be less
to participate. capital-intensive than a 10- or -nm fab program, but in the history
Looking at these policy interventions, especially between 2010 and of semiconductor manufacture, the 2 -nm node has been the lon-
2014, one would assume that by now, India would have charted a strong gest-serving and has yielded the highest volumes.
new growth trajectory for the chip industry. There has been some prog- As for incubation centers, there are two potentially good ones. Elec-
ress in manufacturing, especially with the “Make in India” initiative, tropreneur Park, the fi rst systems-design focused incubation center,
but overall, the domestic value addition has been negligible, even in is funded by the Indian government, managed by Software Technology
marquee products. In mobile handsets, for example, the domestic value Parks of India (STPI), and located on Delhi University’s south cam-
addition is not more than 1 , and India still relies signifi cantly on pus. The other center is Maker’s illage Cochin, a startup initiative of
imported components from a global supply chain. the government Ministry of Electronics and Information Technology
The small value-add clearly does not result in any real growth in (MeitY) with the Indian Institute of Technology (IIT) Trivandrum and
opportunities for the chip industry within India, other than in design Kerala Startup Mission.
services and embedded software — contributions to the value chain These two institutions lead product development and IP creation for

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