By Lt Gen (Dr) V K Saxena, PVSM, AVSM, VSM (Retd)
Chris Miller in his recently released book titled ‘Chip War : The fight for the world’s most critical technology’ gives a fascinating account of a decades long battle to control what has emerged as the world most critical resource, the Microchip Technology, with the US and China increasingly in a conflicting race.
Five countries typically have most of the capabilities on developing and multiplying the Chip technology, US, Taiwan, Australia, France and China. That triggers the Question: Where is India!
The Microchip – that innocent silicon wafer containing on its tiny-self thousands and millions of electronic circuits capable of doing unimaginable number of calculations in microseconds, does not just control gadgets, technology, devices, mobiles, medical, banking, entertainment, weapon systems, roadside ATMs only, but actually the Humanity. Life without a System on Chip ( SoC) as these are referred to, is unimaginable today and in future.
The World Scennario
- The world is increasingly worried about its over-dependence on microchips manufacturing on a single source – Taiwan. Particularly when Chinese entities get control over them through investments and acquisitions.
- With China’s increasing belligerence and assertiveness over the island democracy, ghastly ‘what if?’ scenarios are being played out.
- The apprehension is not without substance, Taiwan Semiconductor Manufacturing Corporation (TSMC) taken together with other Taiwan-based manufacturers hold a whopping 63% (53+10) of global foundry market; Taiwan manufactures most of the chips designed in other countries.
- China by itself has been unable to produce the real advanced chips required for mobile telecom, computers and servers.
- Nonetheless, China has invested USD 50 Bn in semiconductor manufacturing over the last 20 years – more than what it has spent on importing oil. President Xi Jinping sees semiconductors as the ‘vital gate’ that can be used to boost Chinese Economy, and influence the world through exporting cheaper goods.
- Although the rise of Covid and its resurgence in its motherland, that is China itself, there was a temporary pause, Beijing decided to spend a massive $ 143 Bn in the chip industry in the face of US curbs in accessing US-made specialist equipment to manufacture them.
- In Oct 2022, US had announced a sweeping range of export controls to severely curtail China’s ability to obtain some of the world’s most cutting edge microchips. In fact, US got the Taiwanese TSMC to set up a factory in Arizona with a capability of producing 20,000 -5 nanometer (Nm) microchips/month by 2024. Astoundingly, one Nm is one billionth of a meter!
- In Aug, US has signed into law the CHIPS Act 2022 providing for a USD 280 Bn spending that includes 52.7 Bn for domestic semiconductor manufacturing.
- China considers the US move to protect its technologies as The Chip War.
Where is the cutting edge?
The chips are known for their technological prowess and maturity by two parameters, viz, the size and the speed of processing data. The world today is at the cutting edge of 5-7 Nm in chip size and speeds of 1.5 -2 GHz (1 Ghz is a billion clock cycles/second). Theoretically, the scientists have pegged the possible achievable speed of microchips as 1 petahertz (100,000 times faster than today’s cutting edge capability).
Where are we?
Our status, not very far back in the past, is briefly captured thus:
- India has two indigenously manufactured chips, namely, AJIT and Moushik. Both of these belong to 180 Nm technology domain’.
- AJIT has a processing speed of 70-120 MHZ while Moushik processes data at 100 MHz.
- The Semi-Conductor Laboratory (SCL) located at Mohali is the only microprocessor manufacturing facility in India. It was gutted by fire 07 Feb 1989 (for suspicious reasons) wherein, its major imported facilities were destroyed.
- As of date SCL has the capability to make microchips devices in the range of 0.8 micrometres. This is planned to be improved to 0.35 micrometre technology. This is far behind any international standard.
- Actually there has not been much interest from the industry in chips although now biggies like the Tatas are venturing in this sector.
- There was however an attempt by a retired naval officer, Cdr Willy Sinha, in the 1970s to set up a small scale unit to make semiconductors in Okhla.
What has happened in the recent past?
Over the past 2-3 years, the Govt has shown consciousness both about our ‘chip vulnerability’ as well as the need to acquire muscle in the niche microchip technology domain. Some actions in the recent past are:
- In Dec 2021 the Government did a major investment of USD 10 bn (80,000 Cr) aimed at positioning India as a key player in the global supply chain in the domain of chip and display production. In fact, the Government has announced it would extend support to the extent of 50 % of the cost of a semiconductor factory.
- Taking it forward, India is now looking at some 25 Bn investment from worldwide to boost local manufacturing of chips and display panels in India.
- Notably, India’s presidency this year of the G 20 is proving to be a positive catalyser. Just in Sep 2022, nudged by the US, Taiwan’s world leader in chips Foxconn announced a joint venture with Indian conglomerate Vedanta to set up a semiconductor facility in Gujarat and make it operational by 2024.
- Foxconn is the single biggest source of chips for Apple, which itself has declared to lift more components and software from India.
- Significantly, in Sep 2022, the Ministry of Defence (MoD) issued a Request for Proposal (RFP) for 500,000 microchips, of which 50,000 chips would be for critical defence systems, of military grade, and capable supporting 21st century net-centric operations The one for defence use will be mil-std (conforming to military standards) and capable of supporting secure net-centric operations with AI capability.
India 2023 and Beyond
India’s status in the semiconductor Industry has been well described by Mr Ashwini Vaishnav, Union Minister for Railways, Communications, Electronics and Information Technology at the recent World Economic Forum in Davos on Jan 2023. He disclosed that the chip industry, which was insignificant a few years back, is a promising sector now with $ 87Bn investments.
Sector-after-sector our industry (as a whole) is shifting from import substitution to export net growth. All this growth will basically require semiconductors hence the demand is burgeoning, he observed.
India’s Talent Pool
India possesses a tremendous talent pool. Some 52,000 engineers are currently working in the semiconductor industry, working across the entire chain from legacy nodes to cutting edge Systems on Chips (SoCs). And, Indian universities are geared to produce about half a million engineers every year. Some 85,000 of them would be semiconductor engineers within a span of 10 years.
It has taken 60 years for the global semiconductor industry to grow to $550-600 Bn. It should hit the $ 1 trillion mark by 2030. There is enough for everybody. The abiding theme is innovation.
For instance, how hundreds of microchips going in a system can be reduced to just a few? How can chips made by different countries talk to one another seamlessly? How can an automobile operating system be created for cars or aircraft or machines made in different countries.
In India, all our semiconductor manufacturing will be served by green energy. We already have some 42% of our energy from green resources.
A lot is happening in India, which should make us proud.
