DailyPost 2045

Mysore, Karnataka and India scripted tech history with an agreement between ISMC and Karnataka to set up a Semiconductor Chip Plant. Semiconductors are at the heart of every gadget we use. Covid-19 proved that the seamless semiconductor global supply chain can be broken beyond our imagination. Dependence on one source or a very few sources, can throw economy after economy out of gear. As the chip is the critical component of a wide variety of gadgets, automobiles, aircrafts, literally anything we use today, it cripples the forward linkages completely. It impacts production, business, costs and finally even employment. Companies cannot sit on the bench endlessly.

Chip production through design soft pedaling was not going to take countries and economies any further. The story is very simple, either you have it or don’t have it. The US even with some capacity at home faced serious music and started getting into the act desperately. There was a similar fate for a large number of countries. India was no different. It realized the handicap and decided to go ahead to woo investment and technology at whatever cost. It apportioned $10 billion to take the first giant step. Any amount of capital investment in the field is peanuts. Time and money both have to be spent liberally, for a chip fab to happen, besides excellent talent and immense capability to experiment and research. Chip is a marvel of modern engineering and for any marvel to happen, it takes time. TSMC is the reigning deity.

ISMC (International Semiconductor Consortium) announced plans to build a $3 billion semiconductor chip plant at Karnataka’s Electronic Manufacturing Cluster in Kochanahalli near Mysore. ACS, IT & BT and Director of ISMC signed a memorandum of understanding in the presence of the CM. Karnataka has thus outsmarted various states in this competition to set up semiconductor fab. Karnataka is already the largest chip design hub in India, consisting of 85 fabless chip design houses and is the leading producer of aerospace and defense equipment in India. To attract this sector too, the Karnataka government had announced a slew of incentives in Sept 2020. It seems to yield fruits. The already available electronics and chip design ecosystems would turn out to be great enablers.

ISMC is a joint venture between Abu-Dhabi based Next Orbit Ventures and Tower Semiconductor. Tower is an Israeli semiconductor firm that Intel announced it has plans to acquire. ISMC said it will set up a 65 nm Analog fab technology partnership with Tower. It would be India’s first and largest semiconductor fabrication unit. ISMC Digital Fab is one of the three applicants for the Union Government’s $10 billion incentives for semiconductor manufacturing. Creating a home-grown semiconductor fab would turn out to be counterproductive given its gestation period of reaching the capability of worthwhile production and our immediate nature of requirements. Additionally, it would be a cash guzzler. The perils of cut throat competition and a race against time in research, we all know. The world leader TSMC has the first foundry to provide 7 and 5 nanometer production capabilities. Given the scenario, this chip fab would usher in a new era of home grown semiconductor enabled multifarious seamless production.

Sanjay Sahay, Ex.IPS,
Founder Director,

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