Indian semiconductor manufacturers: India’s semiconductor industry could play key role as global supply chains shift: Chris Miller

The US, Japanese and European firms are being told not to use Chinese chips in their non-China supply chains, potentially opening up a big addressable market for Indian chipmakers, said best-selling tech author Chris Miller.“They need to find new capacity. That’s a role that India can play,” said Miller, who has written a book titled Chip War: The Fight for the World’s Most Critical Technology.

One of the challenges for Indian semiconductor manufacturers is to convert announcements into commercially viable projects, he told reporters in Bengaluru. Once the infrastructure, and the suppliers of materials, chemicals and tools are available, it will be a snowball effect to attract more firms, he added.

“The broader electronics ecosystem in Bengaluru and Tamil Nadu is exploding in a manner that has no precedence in India,” Miller said.

“These are expensive and complex projects (one fab and four chip packaging facilities announced by India) that need specialised infrastructure,” he said, adding that it took Taiwan 30 years to become a major player, so the timelines are long.

US-India partnership

“We’ve seen over the past couple of years a deepening technology partnership between the United States and India where semiconductors have been one of the central pillars, and that is not going to change with the new (Trump) administration” Miller said.In India this has coincided with a push from the government to invest more in the semiconductor ecosystem here both in terms of India’s integration with international supply chains but also with more domestic production of products, he said.

“This is in alignment with the desire to make more in India and the US’ desire to have closer partnerships with India,” he added.

There’s been a lot of investment in manufacturing and OSATs (Outsourced Semiconductor Assembly and Test), he noted.

“Over the last three years the progress (in India) has been impressive,” he said.

In response to a question from ET, Miller along the sidelines of the three-day 38th International Conference on VLSI Design conference said, “It is one thing to have announcements of investment, you have to actually realise them. That’s difficult in every country.”

“For leading edge, there are a lot of investments being done in Taiwan, Korea, and the US, that is not what India is investing in. For lagging edge or foundational semiconductors, China is investing more than everyone else combined,” he said.

“Will Indian companies be comfortable in using Chinese foundries? Probably not,” he said.

There are two main trends that are currently reshaping the semiconductor industry – shift in supply chains being driven by political factors and geopolitical factors, and the impact of artificial intelligence, said Miller.

The conference focused on the theme Silicon Meets AI: Sustainable Innovations in Accelerated Computing, Secure Connectivity and Intelligent Mobility.

“We’re seeing the impact of AI on the chip industry visibly in the production of AI processors, and we’re going to see a ripple effect in different types of products as AI is put in edge devices. Both these trends will persist for a long time, at least a decade,” Miller said.

He pointed out that there isn’t a single country in the world that is self-sufficient in semiconductors across the supply chain. “Everyone is reliant on somebody else whether it’s lithography machines from ASML or advanced fabrication in Taiwan,” he said.