India to build billion-dollar analog wafer fab

India to build billion-dollar analog wafer fab

Business news |
By eeNews Europe

This announcement came as a bolt out of the blue.

At the IESA Vision Summit held a couple of weeks ago, absolutely no news about the two wafer fabs came out — the Indian government and two consortia announced in 2013 that they were investing $10 billion to set up two semiconductor wafer fabrication plants.

According to my sources all the panelists who were waxing eloquent on the ecosystem and manufacturing capabilities of Indian companies during the Vision Summit conferences were specifically asked not to bring up the topic of the two fabs. If one might recall these two fabs are supposed to be set up with a total investment of $10 billion by two consortia — one including IBM Corp. and Tower Semiconductor Ltd. and the other including STMicroelectronics, HSMC and Silterra Malaysia. Neither representatives of the Indian government nor industry experts gave any hint on record. But off the record, when I asked them about the fabs, they gave a wry smile and replied me with another question, “Who has got the money right now?”

So that was that — the existing fabs’ in-principle approval by the Cabinet, which came a year later on February 14, 2014. There has been no news from the government nor the consortia after that.

Now, just one day short of one year, comes this news about an almost unheard-of company called Cricket Semiconductor wanting to set up an analog fab in India. And that too, on the eve of the World Cricket Cup being played in Australia which has caught up everyone in maniacal cricket fervor.

If it were not for the promoters of Cricket Semiconductor, who are Texas Instruments’ veterans, and a KarMic connection, this most recent annoucement would have passed off as a joke.

According the Cricket Semiconductor website (which is a sparse three-page affair), Lou Hutter, CEO, Cricket Semiconductor, has a total of 35 years in the semiconductor industry and has spent 29 years at Texas Instruments Inc., until 2007.

As director of TI’s Mixed-Signal Technology Development, he was responsible for their worldwide analog, power, and mixed-signal technology development, process delivery kits, and production ramps supporting every business unit in the company. He joined South Korea’s Dongbu Hitek in 2008 as senior executive vice president and general manager of the Analog Foundry Business Unit, where he was responsible for technology development, process delivery kits, IP development, and sales and marketing.

Since 2012, he has been principal of Lou Hutter Consulting, specializing in the areas of technology, design infrastructure, organizational management, and business development, with an international client base. Hutter has 47 patents and an MSEE from MIT.

Next on the two-man team is Mark Harward. With over 25 years in the semiconductor industry, and 14 US patents, he has spent over eight years at TI, working in the R&D Group’s VLSI Design Labs and managed new product development in the Semiconductor Group’s ASIC business. Since 1994, he has been a serial entrepreneur, founding TestChip Technologies in 1994, which focused on automating the development of test chips used in silicon technology development, and was acquired by HPL Technologies.

Intriguing India-Dallas analog link
Now comes the most interesting part. While Harward was at TestChip Technologies, he co-founded Karnataka Microelectronic (KarMic) Design Centre, Pvt. Ltd., in 1999, an India-based company focused on the design of analog and mixed-signal ICs, where he continues to serve as CEO.

KarMic Design Center, well-known in the industry for over a decade. Its 300-strong design services team has expertise in analog, RF, mixed signal, memory and high performance digital domains and has two centers in India and one in Dallas, Texas.

Way back in 1999 Mark Harward and Shivaling Mahantshetti, who is known as the father of analog in India (a former TI veteran as well), had come together to establish KarMic, which was slowly but silently building a pool of analog engineers in India. Today, Mahantshetti, who has over 60 patents and over 25 years of the analog space, is the chairman emeritus of KarMic and is now focusing primarily on teaching the new generation of students the principles of semiconductor design, as managing director of Karnataka Microelectronic Research & Training Centre Pvt Ltd.

So, probably something could come out of it.

  1. The investment of $1 billion is on the lower side compared to $10 billion earmarked for the earlier two fabs. However, as Cricket’s Hutter said in a press statement:

    India has a large and fast growing electronics market. A specialty wafer fab focused on analog/power semiconductors is well suited to catalyse the Indian Electronics System Design and Manufacturing (ESDM) ecosystem. We are confident that we can establish a high-volume, globally competitive specialty wafer fab in India.

    This project differs fundamentally from typical wafer fab projects in several ways. The project outlay, at around $1 billion is less than less than 1/10th of a leading edge digital fab. The emphasis will be on processes and technologies that align to Indian as well as global requirements such as industrial and automotive. Importantly, the cost of analog / power semiconductor product development is significantly less than digital semiconductor products. This lowers the investment entry barrier for Indian entrepreneurs to bring innovative products to the market, stimulating the ESDM ecosystem and leading to the creation of many thousands of jobs.

  2. The fab would manufacture analog/power chips that can go into products such as mobile phones, UPS inverters, smart meters, automotive as well as other industrial products. Large economies of scale are required to drive down costs. This fab will produce 60,000 wafers per month — at this sort of volume, the fab could become cost competitive.
  3. Government support is critical and is needed to make a fab competitive. That is a lesson that India needs to learn from the Chinese. The government of Madhya Pradesh, which recently approved an analog semiconductor (probably keeping Cricket Semiconductor in mind) says it will provide free government land and reimbursement for the cost of building the shell of the manufacturing unit. It also promises power supply from two separate power grids as well as water for a price fixed for 10 years
  4. Undoubtedly there is a local demand for electronic goods but no one is really sure if the “Made in India” chips can compete on costs with those imported from other Asian countries. India consumes close to $7 billion worth of semiconductors every year and this is expected to expand to $55 billion by 2020. The Indian electronic system design and manufacturing (ESDM) market will grow from $76 billion in 2013 to $94 billion in 2015, according to IESA.

Too many “buts”
But the numbers were looking good way back even in 2006 when SemIndia, a company formed in the US by Non Resident Indians (NRIs), attempted a fab in Hyderabad at an estimated $3 billion investment.

But SemIndia’s project never materialized because the incentives offered by the government were too little. It died after three years.

Almost two years ago, the news of the other two fabs came up. But until now there is no concrete evidence that they are going to be set up and rumors abound about lack of funds.

Then along comes this analog fab. But again, the billion-dollar question is still: Where the actual money is going to come from?

 —Sufia Tippu covers the Indian semiconductor industry for EE Times. She is based in Bangalore, India.

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