India is a leader in semiconductor design but has also recently declared aspirations to extend manufacturing capabilities. What are the ground realities to consider before expanding capabilities beyond chip design and into setting up fabs? 

The fab debate has been going on for a long time, and in fact, Cadence wrote a blog about this back in 2017. While it is feasible for India to set up fabs, and there have been several proposals in the past to do so, there are two types of challenges in the fab business that have to be assessed first. These challenges are business- and technology-related. The first business challenge is the high capital cost associated with setting up a fabrication facility and the requirements for solid infrastructure such as uninterrupted electricity, access to ports, water, and a good road network. Setting up a fabrication facility can easily run several billion dollars. For advanced node fabs, the costs are higher still. A related business challenge is that fabs need a robust supply chain to cater to run it, from an operations perspective. This involves the raw materials required for the fab to operate, none of which are manufactured or available in India. So, these materials have to be imported, which means that the fab has to be fully loaded to justify the cost. This brings me to the third business challenge, which has to do with the demand for the fabrication facility. Daily operational costs of running a fab run into tens of millions of dollars. Anytime a fab sits idle, it incurs huge losses. Indian fabs would have to ensure that there is enough market demand - from domestic or international players - to keep them operational at all times.  

Technology challenges centre on the knowledge required to build and manage the day-to-day operations of the fabs. India is well-known around the world for its design expertise and project management skills, but building and running a foundry requires expertise in the latest manufacturing technologies as well as knowledge of factory optimization techniques, advanced process controls, material sciences, and yield enhancement to name a few. That kind of expert knowledge is what the technology partner brings to the table.

Jaswinder Ahuja, Corporate VP and India Managing Director of Cadence Design Systems

So where does India stand? And where can we go from here?

Keeping these challenges in mind, the proposals cleared by the Indian government so far are for specialty fabs focused on 90nm, 65nm and 45nm geometries as ongoing investments at these nodes are not prohibitively high. Further, specialty fabs focused on mixed-signal, analog, power management and MEMS are predicted to have high-growth markets, thanks to technology trends like the Internet of Things (IoT), mobile connectivity, and wearable devices. The road to setting up a fab in India can be through assembly-test-mark-pack (ATMP) facilities. This is the way Taiwan did it; we can learn a few good lessons from their experience. 

The time is right for a discussion about fabs in the context of the government and the strategic self-reliance in electronics. Investing in a fab is a part of that discussion.

Due to geopolitical uncertainties and unexpected global occurrences (such as remote working), the global electronics supply chain can potentially be disrupted. While the consumer electronics market may be able to withstand these setbacks, it is a different matter when it comes to national security. Since an advanced node fab is likely to be commercially unviable, a second-hand fab at 28nm might be the sweet spot, taking care of India’s current need for domestic semiconductor development for strategic electronics. 

Another option that can be considered is setting up a fab for specialty technologies — GAN, SIC, high-voltage devices, RF, AMS, for example. This will have a good domestic market for inverters, chargers, EV, etc., and will not cost more than $500-700 million. 

Tell me more about your involvement in FabCi and the impact it is expected to deliver 

Cadence collaborates with two of the country’s fabless chip incubators, FabCi (at IIT Hyderabad) and KLE Incubator in Hubli, to enable semiconductor innovation and entrepreneurship. Both of these entities have access to the full range of Cadence tools. Innovation and entrepreneurship are essential for the growth of the Electronics System Design & Manufacturing (ESDM) ecosystem in India. Incubators such as FabCi play a catalytic role in lowering barriers to entry and fostering entrepreneurship. Cadence has been working with the Government of India, industry and academia for many years now to grow the ecosystem. 

The govt has been keen on setting up fabless semiconductor manufacturing for years now, but what ails this endeavour? How can new policies like National Electronics Policy 2.0, PLI, SPECS and EMC2.0 deliver?

The fabless business is extremely investment-intensive. This article is a bit dated, but it noted that: “For those who migrate beyond 16nm/14nm, it will require deep pockets. In total, it will cost $271 million to design a 7nm chip, according to Gartner. In comparison, it costs around $80 million to design a 16nm/14nm chip and $30 million for a 28nm planar device, the research firm said.”

While the frameworks of both NPE 1.0 and 2.0 are both good, the challenge has been execution on the ground. In addition, entrepreneurship in this area seems to be sluggish, but that is exactly what is required to make a real impact. In addition to the NPE, over the last few years, there have been a few incubators and accelerators that have come up to encourage entrepreneurship. FabCi, launched by the Indian Institute of Technology Hyderabad and whom Cadence collaborates with, aims to create an ecosystem to provide chip design start-ups with free design software and a characterization facility. Another entity involved in incubating chip design development is the Electropreneur Park (EP) in Delhi. EP is a first-of-its-kind electronic system design and manufacturing incubator fostered by MeitY and already has helped 40 start-ups. The EP provides not just infrastructure and access to funding, but, crucially, mentorship as well. Government policies are important, but equally important is the implementation of the policies on the ground as well as having entrepreneurs who will avail of the support being extended. For a vibrant fabless network to develop, we need entrepreneurs, fresh product ideas and funding. There is great potential for ideas, and funding can be found, but before that, we need entrepreneurs who are willing to take risks.

In the past few years, hardware startups are rising in India. What are your thoughts on their calibre and what kind of opportunities exist for them to expand? 

The opportunities that India offers for electronics are vast. With a huge and growing domestic market, abundant talent with deep expertise in design and project management and funding available for the right idea and business model, it is a perfect time for entrepreneurs to seize the day, so to speak. 

Can you touch upon how ML and AI can effectively aid chip design? 

This is an area where Cadence has been making investments and strides in innovation. Artificial intelligence (AI) promises to revolutionize people’s lives. Whether it’s autonomous cars or advances in the medical industry, we can all benefit from this revolution. Convolution and recurrent neural networks and machine and deep learning algorithms present the opportunity to enable this electronics revolution and create a new silicon renaissance with advances in software and IP. We’re already using machine learning (ML) techniques to produce better, more predictable outcomes for many tasks in the design flow. ML helps our customers meet their time-to-market requirements, improve their design process and reduce the amount of manual intervention necessary. Our tools now suggest solutions to common problems that might otherwise take design teams weeks or months to evaluate. We are also pushing the leading-edge of machine and deep learning research to improve the design of ICs and verification closure with a vision toward design improvement. The Cadence team leverages our libraries of algorithms across platforms and products to ensure our ongoing innovation impacts the full breadth of our design tools and IP solutions.