At the opening ceremony of the Supply Chain Summit co-organized by DIGITIMES and the India-Taipei Association (ITA) on November 14, Ajai Chowdhry, founder of HCL and chairman of EPIC foundation, highlighted India's mission to become a part of the global semiconductor supply chain. In particular, he pointed to compound semiconductors as an area of focus where the Indian government is actively seeking investors.
Ajai Chowdhry is a founder of HCL Group and the chairman of EPIC Foundation, a non-profit organization with a vision of "transforming India into an electronics hardware product nation." EPIC is an acronym for Electronics Products Innovation Consortium (EPIC), as well as signaling that it wants to be the "Epicenter of Electronics India." Now serving as an advisor to India's National Semiconductor Mission, he regularly meets with senior officials of the Indian government and participates in the reviewing process of investment applications.
Chowdhry has advocated for semiconductor manufacturing in India for more than 30 years, and he believes that the Indian government is now presenting an excellent deal for semiconductor companies worldwide, especially industry titans like TSMC, to invest in the country. The central Indian government is committed to providing upfront incentives of 50%, and the state government is promising an additional 20%. Chowdhry pointed out that this is more than double what the US government offers and that "there is no better deal in the world other than India!"
Despite those benefits, he noted that they've struggled to get investments going over the past two years because most companies that came to them with investment proposals "hadn't put together a good business plan." If the Indian government is giving out 70% incentives on capex, it's only natural that it wants to give the incentives to companies that can succeed.
Thus, India decided to reinvite semiconductor companies and give everyone another opportunity to come back. During his keynote, Chowdhry highlighted what the global advisory board of India's semiconductor mission (including himself) is looking for when reviewing investment proposals: technology, business plan, capability, and leadership.
When discussing ongoing semiconductor investments in India, Chowdry pointed out that the most significant investments right now are Outsourced Semiconductor Assembly and Test (OSATs). This includes US$825 million from US-based NAND/DRAM manufacturer Micron as well as India's own Sahasra Semiconductors and Kaynes Technology. Wafer fabs proposals in the first wave were rejected because they were "inadequate."
Additionally, chip manufacturing equipment maker Applied Materials has set up a new semiconductor center for commercialization and innovation while Lam Research has launched a training program in India for up to 60,000 high-tech engineers.
Chowdhry stated that amidst the China Plus One trend channeling investments into other emerging economies, the Indian government is doing a lot to further expand its semiconductor manufacturing capabilities. This includes signing pacts with the US and Japan regarding the semiconductor supply chain.
Seeking investments in compound semiconductors
When discussing areas where India is looking for investments, he highlighted three major sectors: CMOS semiconductor fabs, display fabs, and compound semiconductor fabs. In particular, he placed a large focus on compound semiconductors, which include silicon photonics, sensor fabs, ATMP (assembly, testing, marking, and packaging), and OSATs.
One of the reasons why Chowdhry highlighted compound semiconductors is that India has a very significant market for EVs, one of the major applications of compound semiconductors. Specifically, India is already the world's largest manufacturer of two-wheeler EVs, with a "mega-factory" coming up in Southern India. To support this massive market, India will require a lot of EV components, which is where investors can come in.
Furthermore, compound semiconductors take less time and less investment to set up. While benefiting from the same incentives as CMOS, compound semiconductors get to enjoy a still-expanding market in EVs, and India's domestic market fueled by its population of 1.4 billion (recently surpassing China as the world's most populated country). In contrast, CMOS will have to rely on exports. These are all reasons he believes that compound semiconductor is an area Taiwan should "very seriously look at India" for investments.