The semiconductor design incentive program has to be improved: ICEA

In order to enable the creation of the nation’s own intellectual properties (IPs), the India Cellular and Electronics Association (ICEA) said on Thursday that the semiconductor design-linked incentive (DLI) program has to be improved.

 

The ICEA has suggested include mask sets in the DLI plan and subsidizing their cost by up to 80% for the design businesses, given the very high costs associated with semiconductor design and IP development.

A mask set is an assortment of photomasks necessary for integrated circuit design. It functions essentially as a template for what will be printed on a raw wafer that is used to make chips.

Mask sets typically cost between $1 and $20 million to produce, depending on the intricacy of the design and the particular manufacturing technique used. Since there are now no indigenous facilities for making masks, the same are currently imported from nations like Taiwan. According to ICEA, this expense poses a major barrier to entry for small businesses or those looking to develop a novel chip design. The research focused on India’s semiconductor industry.

The industry has suggested, among other things, that bigger businesses concentrate on developing their own intellectual property and become involved in semiconductor design ecosystems.

Pankaj Mohindroo, chairman of ICEA, said, “India stands at a pivotal juncture to redefine its role in the semiconductor value chain as we navigate through a transformative era in electronics manufacturing and hi-tech technology.”

Mohindroo believes that as they have the ability to support high-caliber startups in the field, bigger businesses need to be invited to join the design ecosystem.

“We need to build more than 200 product design companies over the next five years and create our own ideas across different categories for making a space in the semiconductor design ecosystem,” said AM Devendranath, CEO of research company Feedback Advisory.

Devendranath said, “We need to give the domestic design companies the right kind of financial support so they can expand in their own market.”

The government’s `76,000 crore semiconductor incentive program includes the semiconductor DLI scheme. For the DLI initiative, the government set allocated `1,000 crore. Nine proposals have been accepted by the government so far under the design concept.

Since many companies, including Qualcomm, have shifted to 5nm, 3nm, and 2nm technology, Taiwan Semiconductor Manufacturing Company (TSMC) now has spare capacity of 7 nm. This underscores the need of strengthening the DLI scheme, particularly for mask sets. Indian entrepreneurs are able to meet the demand by designing chips at that node.

According to ICEA, having mask sets available at DLI India would help promote the development of a globally competitive design environment.

Currently, India is home to around 20% of the world’s semiconductor design engineers, who create over 3,000 chips annually. But as Devendranath pointed out, the majority of engineers are employed by large corporations, which limits the amount of domestic intellectual property produced.

ICEA has made many important suggestions, including urging the government to concentrate on developing a skilled workforce in semiconductors to support a self-sufficient semiconductor ecosystem and investing in refurbished fabs.