Ashwini Vaishnaw On India's Mega Semiconductor Push | NDTV Profit Exclusive
Will India become a semiconductor superpower?
IT Minister Ashwini Vaishnaw in conversation with Tamanna Inamdar. #NDTVProfitExclusive
IT Minister Ashwini Vaishnaw in conversation with Tamanna Inamdar. #NDTVProfitExclusive
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00:00 But let me begin by understanding why this is such a big deal.
00:07 Because all through the pandemic and afterwards, the world first learned about how crucial and vital these very little objects are.
00:16 What we have decided yesterday and what we've done yesterday,
00:20 how will that lay the foundation to truly be Atmanirbhar on semiconductors?
00:25 See, semiconductor is basically a foundational industry. Everything that we use in our houses today,
00:37 in our offices today, during our travel, everything has semiconductor in it. For example,
00:43 within the home, starting with your refrigerator, the light, the fan, the air conditioner, TV, mobile phone,
00:53 going out of the house, the train that you catch or the metro that you catch or the car in which you drive or the bike or scooty.
01:03 If you travel outside, every, practically every equipment that we see today, anything that requires a switch on and switch off,
01:12 every such thing requires a semiconductor in it. So, practically this is like a raw material
01:20 which is required in every sector of manufacturing. Whether it is steel making or car making,
01:27 whether it is manufacturing aeroplanes or manufacturing trains. So, this is very, very important for our economy.
01:37 That's why our Prime Minister Shri Narendra Modi ji has put huge focus on getting the semiconductor industry into India.
01:45 The first policy proposal which was published in early 2022, after that we kept on working on the,
01:54 on developing the ecosystem. Because it's a very complex industry, it requires thousands of different types of
02:02 gases, chemicals, consumables to be able to run a fab properly. So, we focused on getting the ecosystem
02:12 into India. And then came the announcement of Micron and within 100 days of approval, the construction of the factory started.
02:20 That gave huge confidence to the world and yesterday our Prime Minister approved three more proposals.
02:27 One fab of Tata and Power Chip of Taiwan and two ATMP units, one of Renaissance CG power, second one is of Tata Electronics.
02:37 So, these three projects combined and the Micron project gives us the foundation for laying the,
02:45 setting up the semiconductor industry in India. This will basically cater to our automobile industry,
02:52 our electric vehicle industry, power electronics, consumer electronics like TV, refrigerator, all these items,
03:02 to our defence and space sectors. Practically every industrial and domestic application,
03:08 consumer applications will be benefited by these four plants.
03:13 Sir, I just wanted to understand the cumulative investment for these plants is 1.26 lakh crores.
03:20 How much of this will be given by the government as part of the PLI scheme?
03:26 I am trying to get a sense of how much we are incentivizing and subsidizing these projects.
03:32 As of course, we need to world over the US etc. Everyone is doing it. It's high cost.
03:38 But what is the sort of a breakup and picture when it comes to this fresh lot of plants?
03:44 So, we have a very robust assessment process of the project cost.
03:52 There are items which are admissible as expenditure. There are other items which are not admissible as expenditure.
04:00 So, and this is a team of professionals who benchmark everything as per the global best and as per the actual cost which gets incurred.
04:09 Basis that our policy is 50% incentive is there and that incentive gets repaid significantly as the industry progresses.
04:20 It's a very interesting structure and by which this industry gets set up. And our investment which was approved as the program was 76000 crore.
04:33 This is the, this is like, this is the first part of this entire journey. This is going to be a 20-year journey.
04:43 We have to lay the foundation. We have to make sure that the entire value chain comes to India.
04:48 We have to make sure that our strong design capabilities, they are further strengthened.
04:56 The fab comes and ATMP comes. So, this entire value chain comes to India. So, that's the way with which we are working.
05:03 It's a very long program. It will take for the coming many years we will continue to get the benefit out of this and continue to grow this program.
05:12 What is the outlay you see, sir, in FY25 out of the 76000 crore rupees and do you expect to, expect it to increase?
05:20 We will have a full budget after election. So, I won't be, I won't be able to get, I won't be able to get into those minute details.
05:30 Broadly the four units will lay the entire foundation because they bring the entire capability.
05:38 I also want to point out couple of more things. First, northeast is one part of the country where our Prime Minister has put huge focus.
05:47 More than 50 times he has personally visited. We have highway connectivity, railway connectivity, air connectivity, optical fiber connectivity.
05:56 And now such a high tech project is being set up in northeast. That itself is a very big thing.
06:02 27000 crore investment coming in Assam and that will again boost the economy of northeast.
06:08 Second point which I would like to emphasize here is, today the ATMP technology has got developed in India.
06:15 Which basically gives us a huge capability. It makes us totally at par with the best in the world.
06:23 And with these three projects, the way we have structured these projects, the fab capability also will come to India.
06:31 The fab, between design, fab and ATMP. When we have all the three value chain components and we have the ecosystem and we have the talent,
06:44 India becomes the most attractive destination for future semiconductor manufacturing by any company in the world.
06:53 So, this is the way our policy is structured, creating that entire ecosystem, all the three parts of the value chain,
07:01 the ecosystem for all the materials which go in and the talent pipeline. Combined all this will lead to and then once we have the semiconductor
07:12 industry, the immediate corollary of that is getting the manufacturing industry.
07:17 For example, laptop manufacturing. For example, mobile manufacturing gets a quantum jump. For example,
07:23 your automobile industry doesn't have to depend upon imported chips in case of any disruption, right?
07:29 For example, during the COVID period we saw the disruption in car manufacturing. That doesn't happen.
07:36 So, many different things fall in place once this basic foundational building block of this large
07:43 industry is available. That's the way we need to think.
07:47 Okay. Absolutely, sir. So, you know, this is fascinating because if you look at what the world is trying to do after COVID,
07:54 everyone realized that they better get, you know, their semiconductor dependability lowered from China, from Taiwan, do their own thing.
08:05 To my mind, and please explain this because you have, you know, you obviously have seen this very in-depth and you are the expert on this.
08:12 Fabbing is the toughest part, which India is now also trying to do. We are making progress in the ATMP part, which is
08:22 assembly, testing, marking, packaging, design. We've always been ahead. Fabbing is the tough one because you need super specialized engineers.
08:30 You need specialized gases, technology, etc. Give us a sense of that. How much of our focus is going to be on that and how important
08:40 or challenging is it to become self-sufficient in fabbing?
08:48 That's actually a very, very important point that you have raised. Fab is definitely the most complex. Close to 16000 items go in
08:59 making a fab properly running, up and running. Practically, if you look at the periodic table of all elements,
09:06 practically every element that exists on earth is used in a fab and it's very, very complex, very refined process.
09:17 So, for example, this is a wafer which is manufactured in fab. This wafer, it looks like a small disc, correct?
09:25 In effect, this is like designing a very complex city on a small disc like this.
09:36 The fabrication which gets done on this wafer, if you take the tip of the nail,
09:47 one lakh times finer, one lakh times smaller, that is the dimension with which the circuit is designed on this wafer.
10:00 You cannot see with your eyes. You have to have very specialized equipment, not even the microscopes that you find in a lab.
10:08 It has to be very, very specialized equipment which basically prepare the circuit on this wafer.
10:18 That is fabrication. And it's like building, for example, within this small little wafer, there are 5000 chips.
10:30 Now, each of this will be very, very small, very minuscule. You cannot see it. Then that is taken out,
10:38 extracted out and ATMP is done. So, ATMP will basically take this small thing out and then using a very complex process
10:50 that small thing is then converted into a chip. So, this small little thing that you see is the chip.
10:57 And chip can then again be like a multi-storey building, right. So, let's say a 20-storey building.
11:04 There will be a common lift which goes, there will be plumbing which is there in the entire building.
11:11 There will be electrical wiring entire building. There will be some floors which are 4 BHK floors.
11:17 There will be some floors which are 2 BHK floors. There will be some floors which will have parking.
11:23 So, all that complexity is there in a chip. A chip of this size can actually have something like 100 kilometers of electrical wiring.
11:33 100 kilometers of electrical wiring. There is cooling system in it. There is heat management system in it.
11:40 It's very, very, very, very, very complex. That's why only a handful of countries are able to master this technology.
11:48 So, we in India under our Prime Minister's leadership are now in a position where the design capabilities
11:59 are getting complemented by fab and ATMP capabilities. ATMP compared to fab is simpler,
12:07 but still it's again very complex as I was explaining. Something which cannot be seen with eyes
12:14 has to be created into a chip like this small item, right. So, then that chip goes into the circuits.
12:22 This is a circuit board. So, this circuit board then goes into equipment. That is the way it works.
12:28 So, once you have design and fabrication and ATMP, then the natural corollary is that people who are designing modules or
12:37 manufacturing modules, they will come to India. People who are manufacturing circuits,
12:42 they will come to India. Then once circuits and modules are there, then people who
12:47 manufacture laptops, they automatically come to India.
12:51 So, that's the way this entire cycle goes. So, it's very, very important to first get the foundational things right.
12:57 And this attempt, very successful attempt of getting four units, all of them very, I just wanted to show you a small chip.
13:08 Chip is like this. -I am going to ask. -Can you focus on this? -I am going to ask my cameraman to zoom in on it.
13:13 Yeah, I am going to ask my cameraman to zoom in on it. -Please zoom in on this. -Yeah, yeah. If they can show it.
13:19 This is just fascinating sir, the way we are describing this. We are getting, I mean, for viewers of NDTV Profit,
13:25 you are getting a live demonstration from the minister himself on how all of it works. And just to imagine
13:31 billions of dollars of investment to make that one tiny thing that you have in your hand.
13:37 It's very complex, very, very complex. It's really complex. That's why only a handful of countries and we are very lucky that our
13:44 prime minister has very clear vision and a big focus on it because
13:49 India attempted semiconductor fab way back in 1962, 1970s, 1980, 1984, 2007, 2011.
14:00 But all these attempts could not succeed and finally we have a successful attempt where we are able to get the entire thing in place,
14:09 the entire value chain in place. -So, just to understand further and thank you so much for, you know, explaining and putting an image to
14:18 this complex technology. How much of fabrication, I am assuming that's the full form of when we say fab or fabbing, I could be wrong.
14:27 How much of fabbing are we going to do as part of our current plan? Is that going to be a smaller portion or a majority of it?
14:36 I assume that's also what needs the most investment. -You are right, absolutely. We will be doing 50,000 wafers of this type in a month.
14:48 We will be fabricating 50,000 wafers of this size in one month. That is 300 crore chips in a year.
14:58 It's quite significant. But I can say with good sense of confidence that because of the clarity of policy,
15:09 because of the focus on getting the ecosystem in place rather than pushing the project,
15:16 making sure that the entire ecosystem gets in place and the focus on getting huge pipeline of talent.
15:23 We have tied up with 104 universities where training in semiconductor design and
15:29 manufacturing and ATMP is being given. We have tied up with international
15:35 institutes as well as our SCL semiconductor laboratory, Mohali, to train the workflow,
15:41 the shop floor people, the clean room people. So, all those things in place will lead to at least many more projects.
15:52 At least four times or five times the investment that we have seen today in the coming five years.
15:58 Because the base is there. See, this is the way world is looking. Ten years ago,
16:05 most of the industry participants were saying, should we go to India? That was ten years ago.
16:13 Few years ago, as the entire policy is kept on getting, showing results, people started saying, when should we go to India?
16:23 Now that the ecosystem is there, people will say, how soon should we go to India?
16:30 That's the mindset change which is happening. -Sir, I just want to understand that, I mean, I was reading a figure that
16:38 by 2025, India's demand for semiconductors is going to be about 100 billion dollars.
16:45 And as of today, we have to import this. Am I to understand that by 2029, most of this will be made in India,
16:55 we will start exporting as well. What are the timelines looking like? -Yes, a significant part of our requirement will be made in India.
17:05 We will also become major exporters just like we have become major exporters in mobile phones.
17:11 99% of our consumption is today made in India in case of mobile. And we have become big exporter,
17:17 close to 13-14 billion dollars of exports, right? Same story will play out on semiconductors also.
17:24 We will become a significant manufacturer, meeting our own demand as well as exporting.
17:31 Out of these four units, the unit in Assam will be exporting to some of the best,
17:37 most prestigious automobile companies in the entire world.
17:41 In Europe, in America, in Japan. So, that's the kind of, the Renessa plant and the Tata Power Chip plant,
17:51 they will be supplying to some of the most niche and high-tech products like high-speed trains,
17:58 like defence products, like aeroplanes. So, these will be supplying to some of the most important products.
18:06 They will also be supplying to a large volume base like televisions, like refrigerators, like consumer electronics.
18:14 Practically every gamut will be covered. -Sir, just last point from you and I know, you know, you are busy,
18:24 you have given us this time. Thank you so much. But I just wanted to get a sense, now we have four.
18:29 We have four plants now. There is Micron, I think two by Tatas and one CG Power. How many more are we going to have?
18:38 How many more in the pipeline or are we now going to wait and see what happens with these four projects first?
18:46 This is a 20-year journey. This is not a one-year or two-year program. Creating a new industry in a country,
18:58 correct? So, our Prime Minister has given us a clear target that we should prepare a road map for 20 years.
19:04 So, the way we have structured this entire thing is, get all the technologies, develop the technologies,
19:11 start the R&D process, then move on to designing complete chip, complete chipset,
19:17 manufacturing them in India and exporting them. Then come to advanced research.
19:23 It's a very properly laid out 20-year program on which we are working. And we have a
19:30 very robust team of technical experts. Some of the best global experts are working with us.
19:37 They are the ones who are evaluating everything. They are the ones who are giving us the right advice.
19:42 They are the ones who are structuring the entire journey. And these are really
19:47 very well renowned names in the semiconductor industry.
19:51 And luckily, and this is something very interesting, globally you go to any large semiconductor company,
19:59 chief technology officer, chief production officer, chief procurement officer, so many times the chief executive officer,
20:07 they are all Indians. So, close to 30% of the semiconductor talent is Indian basically.
20:13 So, we are getting lot of good support, lot of good guidance from best brains in the world.
20:20 And that's why the program is so successful. Clarity of thought at the Prime Minister's level,
20:27 clear focus at execution level and extremely good advice coming from best experts in the world.
20:35 Just a last question, sir, slightly off topic, but because there has been so much buzz about the telecom sector right now.
20:45 And one of the players, Vodafone, has recently finally gone in for a fundraiser.
20:50 I just wanted to get your outlook on the sector. Do you see now stability coming in?
20:56 There is of course hope for an investor. Anything that you can comment at this point?
21:04 So, I prefer never to comment on any company which is listed as a matter of policy because of the responsibility,
21:12 the position of responsibility that I hold at this point of time. But what I can tell you is,
21:19 after the reforms that were done in telecom sector by our Prime Minister and getting all, most of the legacy issues behind us now
21:28 and getting a new telecom act in place, at least eight large investment funds have met me so far
21:37 and they want to explore investments in telecom sector in India because the market size is very large,
21:43 the technological acceptance is very high, our digital India, our India stack basically is so widespread
21:52 and that is the gateway to, I mean, telecom is the gateway to digital India. So, combined all these factors,
22:01 the investor interest in India is huge. So, we will see lot of investments, we will see lot of innovations,
22:09 we will see new business models coming up, we will see new technical advances coming up in the coming years.
22:16 So, I know you will not say so, but can I assume that if there are eight large investors,
22:22 Vodafone might see interest from one of them?
22:29 I can only say that from our perspective we will do everything that is possible to attract more investments in telecom sector.
22:38 Fair enough. Thank you so much. Thank you so much for your time, taking all our questions and truly explaining
22:45 in such beautiful detail what the semiconductor, you know, journey will look like for India.
22:52 Just thank you. Fantastic. Ashwini Vaishnav there, Union Minister, talking about India's journey
22:59 to becoming a semiconductor superpower and of course a lot more.
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