A NITI Aayog report from 2019 says that about 600 million people in India are highly affected by water scarcity issues. Three-fourths of the households in the country don’t have drinking water at their premises. Beyond this, nearly 70 per cent of water is being contaminated and India was 120th amongst 122 countries in the water quality index.
The government has of course introduced several schemes to improve the situation. But has the situation improved in 2022? Wherever you move or reside, water availability remains a mainstay of any of our discussions.
Adding semiconductor manufacturing to the discussion of water in India is crucial. But why?
The semiconductor fabs are known to be guzzlers of quality water and power supply. Media reports suggest that the planned Vedanta-Foxconn $20 billion plants would require 40 million litres of water daily. That’s roughly the amount of water needed for a city of over 3 lakh people on a daily basis.
‘Ecosystem’ is never a glamourous topic but it is a pertinent one, especially, in light of India’s semicon manufacturing push. Even developed nations such as South Korea have had issues developing their ecosystem and infrastructure to meet the semiconductor industry’s needs. More recently in 2021, Taiwan experienced severe drought last year which added to the larger picture of chip shortage globally.
In an interview with Krishnan Shrinivasan (Vice President and Managing Director, Lam Research India), BW Businessworld’s Rohit Chintapali explored the numbers involved in the manufacturing of Integrated Circuits (ICs) and more. During the conversation, Shrinivasan said that he was bullish on India’s manufacturing but also suggested that the government should look into the ecosystem and infrastructure while pondering on schemes and policies.
What do you think about India’s push for establishing semiconductor manufacturing in the country?
We actually welcome the setting up of a semiconductor industry in India and are committed to supporting our customers wherever they may exist. Lam Research has had a great track record of supporting customers from very diverse locations. For instance, a very large fraction – about 80-90 per cent of our revenue comes from sales to Asian customers – whether it’s China, Japan, Korea, Taiwan, China or even Singapore. The growth of an industry in India would not add any actual strain on our capacity to support those customers and we welcome it.
It is a fantastic initiative from the Government of India (GoI) to use various schemes including the PLI scheme to incentivise the semiconductor industry to set up shop in India. Because an economy as sophisticated, complex and impactful as India’s ought to have this technology.
Is there something that the government is missing while planning its semicon push?
That’s a really good question. Yes, there are deficiencies. Whenever you start a new industry specifically in the manufacturing arena, you have to take care of the disabilities. Fundamentally, there are ecosystem disabilities. For example, a chip fab requires a steady supply of power, water, chemicals, materials – a steady supply of all these resources at a high quality.
Even developed nations such as South Korea have had – on occasions – difficulty in developing their ecosystem and infrastructure to meet the needs of the semiconductor industry. If I were in a position to advise the government, I would ask them to look at the ecosystem and infrastructure.
What kind of numbers are we talking when it comes to power supply and water supply required per fab?
The amount of power/resources consumption for a fab is actually directly linked to the size of the fab. Typically, most of our people talk about fabs in terms of number of ‘wafer starts per month’. The number of wafers that are processed during a month characterises the size of a fab. Some of the mega fabs in Asian countries go up to over 1,00,000 wafer starts per month.
And when they talk about a wafer – they are speaking about a 300-millimeter (mm) disk of silicon upon which multiple integrated circuits (ICs) are printed. A 300mm disk, which is 1-foot in diameter, would accommodate between a few 100-1000 ICs or copies of ICs.
Some of the recent proposals in India are contemplating 15,000-30,000 wafer starts per month. The scale of the fab would also dictate how much power, water and other resources it would consume. Additionally, fabs use bulk gases in large amounts of high purity nitrogen, oxygen, argon and helium.
Such infrastructure is necessary to accommodate this industry. The industry requires very stringent specifications, because due to contamination in gases or particles or more could degrade the quality of the ICs being produced.
How would an Indian presence effect the international semiconductor market?
India is already very influential in the semiconductor industry. But it happens to be so in a very particular segment of the industry. Almost every major semiconductor manufacturer has a significant presence in India but it’s in the form of circuit design and chip design.
But we don’t actually have a significant presence in the segment of manufacturing. So, it is probably not correct to say that we’re starting from scratch. We are, in fact, already starting from a significant advantage that we have in the design space. Some of our major customers actually have significant R&D capabilities in India. The baseline is set pretty well.
What we are talking about now is actually on how long would it take for manufacturing to come to India and become effective. But what gives us hope today is that the GoI’s approach is constantly evolving. Based on their own fact-finding and assessment of reality they put out a PLI scheme. Then they modified it and the Prime Minister made some announcements at the SEMICON show that was held in late April. Lately, there were further tweaks to the incentive scheme. We are very reassured that the GoI is constantly monitoring the situation, evolving its policies in accordance with realities on the ground.
What kind of skill set would one require to be part of the semiconductor manufacturing process?
Semiconductor manufacturing requires just as broad a spectrum of skills as the semiconductor equipment design. At Lam, we design equipment and we use chemical engineers, mechanical engineers, electrical and electronics engineers and even software expertise. Manufacturing also requires a very broad spectrum of skills. In a nutshell, I would say it requires qualifications like manufacturing engineering. For example, chemistry knowledge is important because we use complex processes and sophisticated chemicals. It also requires a knowledge of statistics and mathematics, because production control in our industry is very statistical.
Manufacturing semiconductors also requires a core team of well-trained professionals who are able to maintain and operate the sophisticated machinery. These equipments cannot be operated by a professional who just has a high school degree.