As First Indian Semiconductor Fab Announcement Seems Imminent, A Govt Study Suggests Top Skills That Will Be In Demand

Multiple indicators last month, pointed to the imminence of the first major semiconductor manufacturing industry in India, with international partnership, finally getting off the ground.

After some mixed messaging from Foxconn and two potential state partners, Karnataka and Telangana, it looks as if the Taiwan headquartered electronic contact manufacturer will finally break the sod in at least one location this year.

In a parallel development, leaders of the Vedanta Group’s semiconductor and display group and Foxconn were reported by PTI to be very confident that they would start building a semiconductor plant in Gujarat in the last quarter of this year for producing chips in 2027. 

The US-based Micron Technology is being spoken about as a possible source of the required semiconductor fab expertise.

Both Vedanta and Tata Electronics (TEPL) have also confirmed that they would be setting up Outsourced Semiconductor Assembly and Test (OSAT) facilities in India — a sort of half-way-house where pre-fabricated semiconductor wafers will be processed to produce the end products.

Professional media in Taiwan has been speculating if the global chip making giant Taiwan Semiconductor Manufacturing Company (TSMC) or Powerchip Semiconductor Manufacturing Corporation could be the partner in an India-based (OSAT) venture — logistically, a sensible move, since they would have fabricated the wafers  in their own Taiwan plants before shipping to India.

Union IT Minister Ashwini Vaishnaw’s assurance at the Confederation of Indian Industry’s (CII) Partnership Summit on 14 March this year that the first Indian semiconductor fab would be announced “in a few weeks” lends credence to the hope that push has finally come to shove in the long road to creating an indigenous semiconductor manufacturing industry.

Skill requirement and job potential

Against this background, a study undertaken for Electronics Sector Skills Council of India (ESSCI) by Kantar and released last week, assessing the skill requirement and job potential in the electronics industry, becomes very relevant.

According to the study, the Indian semiconductor design market is dominated by embedded systems design with a revenue share of 85-90 per cent.

This sub-sector is estimated to have employed around 1.39 lakh persons in the year fiscal 2021-22, and it is expected to employ close to 3 lakh by 2025-26. 

This escalation in demand is based on estimates which valued the Indian semiconductor industry at around $82 billion in 2021-22 and growing at a healthy compounded annual growth rate (CAGR) of 15 per cent, to cross $150 billion in the next five years.

Currently around 55 per cent of the manpower is employed in design and research and development roles as well as in managerial roles: business development and marketing. 

Around 30 per cent of the manpower is in manufacturing, assembly and testing roles and 15 per cent in quality assurance/control roles, plus as after-sales services.

This only reflects the industry’s current preoccupation with fabless design, but once semiconductor manufacturing takes off, with indigenous fabs coming onstream, that will divert more jobs, maybe 40 per cent, into manufacturing and fabrication roles, hopefully before 2026.

Top jobs

The top job requirements roles in the semiconductor and components sector include Quality Analysis and Reliability Engineer, Wafer Test and Sort Engineer, Very Large-Scale Integration (VLSI) Design Engineer, Package Design Engineer, Embedded Product Design Engineer, Technical Lead and Embedded Software Engineer.

Most of these jobs require a minimum graduate degree (technical) and with a postgraduate (technical) qualification preferred by most employers, as well as some industry experience. This is both a challenge and opportunity.

The ESSCI study highlights the broad opportunity for India presented by the burgeoning semiconductor business.

But unstated is a challenge: Technology is a moving window and the very nature of skills required may have to be rethought in the light of the Gorilla in the room: Artificial Intelligence. 

This is brought out by another recent report: the Deloitte 2023 Technology, Media, and Telecommunications Predictions.

The report  reminds that for decades, electronic design automation (EDA) vendors have made tools for chip design, which typically use rule-based systems and physics simulation to help human engineers design and validate chips.

AI, a necessary skill?

“However, in the past year, chipmakers and tech companies have developed homegrown Artificial Intelligence design tools. These advanced tools won’t replace human designers, but their complementary strengths in speed and cost-effectiveness give chipmakers much stronger design capabilities".

Advanced AI can help in three main ways, suggests the Deloitte report: Making new and better chips: Chips below the 10 nanometre (nm) process node are found in smartphones, computers, and data centres; they’re also the costliest to make. Advanced AI tools can design these chips faster than older methods, reducing costs.

Making old chips better: Two-thirds of all chips sold in 2022 were at the 65 nm process node or larger, a decades-old technology. Advanced AI tools allow chipmakers to Take those old chip designs and make them physically smaller and more power-efficient.

Plugging the chip talent gap: About 2 million people work for the chip industry globally in 2022, but the sector needs to find a million more workers by 2030. Advanced AI tools will become increasingly important as a way of bridging the talent gap.

Amrit Manwani, Chairman ESSCI, says "The semiconductor industry is growing at an impressive rate, and it presents a tremendous opportunity for job seekers. With the government's support and bullish industry plans, the industry is set to even grow further, so we need skilled professionals to meet workforce requirements".

To the list of skills required that ESSCI so succinctly lists, is it time to add another — AI?

Indigenous manufacture will inevitably add a fillip to consumption — and Deloitte’s predictions for 2023 also include a useful comparison of which sectors consume semiconductors now and how the pattern will look in 2026.

Clearly smartphones and associated telecom equipment at the back end, will continue to  make for the biggest market segments — and the biggest growth.

No surprises therefore if chips for smartphones are seen by assembly and test ie OSAT players, as the low hanging fruit and the most commercially viable sector of indigenous semiconductor industry.