‘Let’s target having 100 fabless semiconductor companies’, says new IESA chairman

Rajeev Khushu has just been appointed chairman of the India Electronics and Semiconductor Association (IESA). Khushu has over two decades of experience and has worked with Siemens and Atmel. At present, he’s with Texas Instruments India, as director-corporate affairs and government relations. In an exclusive interaction with The Electronics, Khushu, as the new IESA-chairman, discusses the challenges before the semiconductor industry. 

Q1. The first few things that you consider priorities, as the new chairman, for the association?

We are working closely with the Ministry of Electronics and Information Technology (MeitY). We have urged that segments like tablets, ACs, LED TVs, solar invertors, and medical devices be also brought under the purview of the Production Linked Incentive Scheme (PLI). In the next few years, we are likely to witness intense manufacturing of these products in India.

We are working closely with the government to bring assembly, testing, marking, and packaging (ATMP) units to India. There are expressions of interest (EOI), a positive sign in this direction. ATMP units generate more jobs in a country than a fab (semiconductor fabrication plant) does as it is fully automated. We are also thinking about the manufacturing of high-value domestic products. An important aspect is to have start-ups with a goal to have 100 fabless semiconductor companies.

Q2. As we understand, you played a significant role in IESA projects, like electropreneur parks, semiconductor fabless accelerator lab, and intelligent electronics readiness indicator. For the readers, it would be of great interest to know more about the projects? Tell us about these projects.

SAFAL is the first fabless initiative unleashed in synch with the government of Karnataka to promote fabless semiconductor startups. This will help aspiring engineers or entrepreneurs to design products. . Start-ups need not spend crores on EDA software as it is offered free of charge to them. Affordability becomes a major bottleneck for them. We help them design their products – first a prototype, and later a final product.

Electropreneur park is primarily an initiative to develop electronic products. Several companies rolled out of it and have started making products in various domains – like industrial applications, medical, electric vehicles and infrastructure. EP is Bhubaneswar was inaugurated a few quarters back to tap the talent of eastern India and I am sure we will have similar successes coming out of that as well. Our plan is to set up EP across the length and breadth of India to tap the diversity of skills India offers.

Q3. How has your journey been so far, having spent over two decades in the industry?

At Siemens, I was responsible for placement systems, which are basically used by the manufacturing companies. From 1995 onwards, I was responsible for the sale of machines to manufacturing units. During those days machines were mostly installed for local-level consumption in the public sector. During the 90s, apart from inverted duty structures, there were hardly any incentives for manufacturing in India.  Most of these roadblocks have been removed now and such results have started to come. For e.g. India is now emerging as second largest producer of cellphones in the world.

Q4. Globally, there is a chip-crunch! Do you foresee a crisis-in-making, especially in the context of the consumer appliances industry? Or, are we going to sail through this scary situation. If you can share in numbers, what’s the demand-supply mismatch, globally and in the Indian context?

Year-on-year demand in Q1 was in double digits for most of the players creating the demand-supply gap. In Q2 2020, the requirement went down drastically. Many manufacturing units were shut down and production had stopped. This slowed the pace of the semiconductor industry. Usually, Q3 is the busiest time for semiconductor companies, as chips needed for various segments need to be in the market before the end of Q4. Generally, Q4 is a soft quarter. Last year, it was an exception. The semiconductor companies earned more revenue because of pent-up demand, as Q2 was under complete lockdown. Many US companies announced expansion plans, which will see the long-term impact coming in few years. Many short-term measures have been taken together with customers to minimize disruptions. Towards the end of this year, the gap between supply and demand will ease down.

Q5. Is the dream of having manufacturing semiconductors in India, realistic? Given the criss-cross movement of components in the semiconductor manufacturing cycle, huge investments needed, tightly-secured patents, can Indian companies actually step in, into this sector?

At this moment, India might not be in a position to create its own logic fab units. But, global semiconductor companies can start production in India.  What’s more significant is that apart from focusing only on electronics, the government is looking at specialty fabs also apart from logic fabs. Specialty fabs like GaAs are much less capital intensive in the range of 250-400 million dollars compared to several billion dollars required for logic fabs. India is also looking at 22 or 28 nm fabs, which have substantial volumes globally and are comparatively less capital intensive.

Your take?

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