‘Chip Pe Charcha,’ an initiative by the VLSI Society of India, goals to unite international leaders in semiconductor and VLSI design. Dr Satya Gupta, President of VSI, engaged in a thought-provoking dialogue with Chris Miller, the acclaimed writer of the 2022 bestseller ‘Chip Battle.’ This insightful alternate guarantees invaluable views on chips and semiconductors. Don’t miss it.
SG: How has the semiconductor business modified since your guide got here out two years in the past?
CM: The semiconductor business has undergone vital adjustments. First, the surge in synthetic intelligence has intensified the demand for AI-related chips, and corporations are leveraging AI to reinforce design and manufacturing processes. Second, geopolitical tensions, notably between the US, China, and Taiwan, have fragmented the business, leading to distinct markets centered on China and the remainder of the world. Third, quite a few governments, together with these of the US, Europe, Japan, India, and South Korea, are closely investing in native semiconductor manufacturing, resulting in substantial international funding on this sector.
SG: With quite a few new bulletins for fabs and ATMP factories worldwide, will provide quickly outpace demand?
CM: This depends upon the kind of merchandise. For GPUs, there will probably be a continued extreme scarcity resulting from excessive demand from AI purposes and the restricted availability of modern fabs. Semiconductors for electrical autos are additionally in excessive demand because the business transitions from combustion engines. Nevertheless, an oversupply of extra widespread logic semiconductors and utility chips might happen with the inflow of latest factories. Moreover, political components are inflicting market fragmentation, with governments imposing restrictions and tariffs on chips from rival international locations, affecting provide chains and creating each alternatives and inefficiencies.
SG: Many fab initiatives, together with these in Ohio and Arizona, are delayed. What are the explanations, and the way would possibly this have an effect on investments?
CM: There are two main causes for the delays. First, the patron electronics market, together with PCs and smartphones, has been gradual for the previous 12 months and a half, main companies to postpone wafer fab initiatives. Second, there’s a scarcity of expert staff wanted for brand new fab building and operation, notably within the US, the place the variety of new fabs has elevated considerably. This scarcity of specialized staff and the necessity for extra coaching are inflicting additional delays.
SG: Relating to China, with quite a few US sanctions on superior semiconductor manufacturing know-how and gear, can China develop indigenous capabilities to provide sub-3-nanometre chips by 2030?
CM: Catching up within the chip business is difficult resulting from its fast development. TSMC at the moment leads in superior fab manufacturing, whereas ASML is forward in superior lithography. By 2030, China would possibly develop applied sciences just like EUV for producing 3nm and 2nm chips, however their effectiveness when it comes to yield and high quality stays unsure. In the meantime, TSMC and ASML are prone to advance additional, making it more and more tough for China to catch up.
SG: Can China develop 2nm chips utilizing their very own gear and know-how by 2030?
CM: It’s believable that China may develop their very own 2nm know-how and manufacturing gear by 2030. SMIC has been roughly 5 years behind TSMC. If TSMC begins producing 2nm chips in 2025, SMIC would possibly attain 2nm by 2030, supplied they preserve their present tempo. Nevertheless, growing new instruments and processes will probably be essential, and different areas might advance additional technologically by then.
SG: If China had been to develop a aggressive cellular app processor and determined to not use, as an example, Qualcomm chips of their smartphones, what can be the implications?
CM: If China had been to design, manufacture, and scale up manufacturing of smartphone processors with cutting-edge capabilities, they would want to keep away from outdated know-how. Presently, it’s unlikely that China has the capability to satisfy such calls for with their current know-how.
SG: What would the affect be if this situation occurred?
CM: Such a situation can be vital. Chipmakers who primarily promote to Chinese language manufacturers can be notably involved. Because of this, there’s a shift in direction of shifting manufacturing outdoors of China. For instance, Apple plans to assemble 1 / 4 of its smartphones in India beginning subsequent 12 months. Non-Chinese language chip design corporations are additionally desirous about increasing their presence outdoors of China. India, with its giant smartphone market, provides alternatives for American, Taiwanese, and Japanese corporations to collaborate with Indian firms, thus lowering the market energy of Chinese language corporations.
SG: Contemplating that roughly 76% of Indian smartphones are Chinese language manufacturers, what affect wouldn’t it have on US semiconductor firms if Indian producers selected MediaTek processors over Qualcomm resulting from commerce tensions?
CM: This can be a vital concern. US semiconductor firms like Qualcomm and Broadcom are conscious of those dangers. They’re working diligently to take care of sturdy relationships with Chinese language corporations and the federal government whereas additionally in search of to diversify their provide chains away from China to mitigate potential dangers.
SG: Contemplating the present geopolitical scenario, may India perform as a strategic benefit for US semiconductor firms? As an example, if an organization like Qualcomm collaborates with Indian corporations to create an Indian model of cell phones utilizing their processors, doubtlessly capturing 10%-20% of the market share from Chinese language manufacturers, what’s the feasibility of such a collaboration?
CM: This situation is more and more possible resulting from rising geopolitical pressures and investments within the electronics ecosystem. US firms have a powerful incentive to help the event of different merchandise and types in India. There isn’t any motive an Indian-based smartphone firm couldn’t produce a world-class product, sourcing elements from the US, Taiwan, Japan, and India, and compete successfully towards Chinese language manufacturers. This chance extends past smartphones to different merchandise the place Chinese language manufacturers are additionally weak, making it believable to construct aggressive Indian merchandise with the help of US semiconductor firms.
SG: China is closely investing in compound semiconductors like GaN and silicon carbide, that are invaluable for EVs and different energy electronics purposes. Provided that compound semiconductors don’t require superior manufacturing know-how, can China dominate this sector?
CM: Chinese language firms and the Chinese language authorities view compound semiconductors as a big aggressive benefit, with substantial funding pushed by the rising EV market. China is prone to see elevated protectionism and tariffs, which may present assured markets for Chinese language corporations, even when their high quality doesn’t match that of European and Japanese counterparts.
SG: China is specializing in lower-end chips like microcontrollers and Wi-Fi, producing them at decrease prices utilizing older know-how. Might this result in the US and others concentrating on high-end chips whereas China dominates the low-end market?
CM: With out intervention from policymakers within the US and different international locations, China may certainly dominate the lower-end chip market. US, Japanese, and European leaders are involved about China’s subsidies impacting Western corporations’ earnings and should impose extra tariffs and restrictions to restrict the presence of Chinese language chips in international markets. This might end in advanced geopolitical and regulatory battles.
SG: Corporations corresponding to Google, Amazon, and Microsoft are growing their very own customized chips. Might this result in a transformative shift within the business just like the fabless mannequin of the Nineteen Eighties?
CM: The important thing challenges for customized chips are price and complexity. Presently, solely main tech firms with substantial sources can afford to develop them. To make customized chips extra accessible to different industries, corresponding to automotive and medical, we’d like cheaper, easier design processes. AI-driven design software program may assist scale back prices and simplify growth. Moreover, chiplet-based architectures, which contain assembling pre-designed elements, might be a better preliminary step for non-tech firms. Nevertheless, additional simplification and higher design instruments will probably be essential for broader business adoption.
SG: India launched a complete semiconductor coverage across the identical time your guide was launched. How do you assess the progress made prior to now two and a half years?
CM: Appreciable progress has been made beneath the India Semiconductor Mission. Main firms like Micron have began establishing amenities, and there have been bulletins for OSAT and wafer fabrication amenities from Tata and others. Electronics product meeting in India can be increasing, with Apple planning to assemble 25% of its telephones in India, contributing to the general manufacturing ecosystem. Moreover, India’s power in chip design stays notable, and semiconductor product design ought to proceed to be a key focus.
SG: Some imagine India will not be advancing as rapidly as potential. Contemplating India began with minimal semiconductor manufacturing, what are your ideas?
CM: Advancing in chip manufacturing and meeting is a difficult, capital-intensive course of that requires a number of years to finish a single mission. Given this context, progress has been stable. It’s essential to not rush the method however to develop a complete ecosystem to help long-term development.
SG: By 2030, is it sensible for India to have two semiconductor wafer fabs, two compound semiconductor fabs, and two OSAT vegetation?
CM: That is very sensible. It’s sure that India may have no less than two silicon fabs, though the precise sorts of semiconductors, know-how nodes, and capacities will should be clarified. The institution of two OSAT/ATMP vegetation and two compound semiconductor fabs can be possible.
SG: You typically point out that enormous Capex manufacturing initiatives are like ribbon-cutting alternatives and that India ought to deal with design. What must be the main target and technique for India to turn into a ‘semiconductor product nation’ relatively than only a supplier of design providers?
CM: Within the semiconductor business, most monetary beneficial properties accrue to firms producing semiconductor merchandise, not merely offering design providers. The problem for India is to create manufacturers and corporations headquartered in India that promote globally. This has been achieved within the software program sector, and there’s no motive it can’t be replicated in semiconductors. India’s enterprise capital ecosystem must turn into extra {hardware} centered. Expertise exists; it’s about connecting it with enterprise experience and financing, and there are encouraging indicators on this route.
SG: The Indian diaspora has established many profitable semiconductor firms in Silicon Valley. How can collaboration between Silicon Valley and India be improved to make India a ‘semiconductor product nation’?
CM: Enterprise funding for {hardware} in India wants to extend and lengthen over longer durations, just like Silicon Valley. Whereas software program ventures obtain extra VC consideration, {hardware} initiatives require help over a five-year or longer horizon to design and launch merchandise. For each ten software program firms funded, no less than one {hardware} firm ought to obtain help. Indian firms may leverage the massive home market to check and refine merchandise earlier than international growth. This method has not but been totally utilised however provides a promising mannequin for Indian corporations.
SG: India is anticipated to leverage its almost $200 billion home electronics market. Nevertheless, round 90% of this market is served by international product firms that resolve on chip sorts outdoors India. How can India develop its electronics product firms and types to create demand for native chips?
CM: The success of non-US chip design firms like MediaTek and Huawei illustrates the potential of specializing in electronics system-level merchandise. Huawei grew its chip design by means of its telecom and smartphone methods enterprise, whereas MediaTek built-in itself into the worldwide smartphone ecosystem. India ought to deal with rising electronics merchandise corresponding to EVs and transportation to create leverage for home chip firms.
SG: If India goals to create one or two firms like MediaTek, what must be the technique and focus areas?
CM: MediaTek’s success stemmed from timing its funding in smartphones. For India to duplicate this mannequin, it ought to goal totally different markets corresponding to EVs and medical gadgets, leveraging its distinctive and enormous home market in transportation and healthcare. The applying of AI to healthcare, wearable monitoring gadgets, and modern medical gear presents vital alternatives for semiconductor innovation.
SG: Lastly, after semiconductors and AI, what might be the subsequent international battleground the place international locations will search supremacy, and would you contemplate authoring a guide on it?
CM: Though I’ve not began a brand new guide but, I’m desirous about biotechnology and genetic engineering, notably with the appliance of AI. Main improvements in these areas appear imminent. In 10-15 years, biotechnology and genetics may advance as considerably as chip know-how does as we speak.
This interview was transcribed by Nidhi Agarwal, who’s a journalist at EFY. She is an Electronics and Communication Engineer with over 5 years of educational expertise. Her experience lies in working with growth boards and IoT cloud. She enjoys writing because it permits her to share her information and insights associated to electronics, with like-minded techies.
