In this episode of Interpreting India, we’ll take a closer look at the Indian government’s semiconductor policy and the country’s potential in the space. What have governments across the world been doing to strengthen production capability? How do they compare with India’s semiconductor policy of December 2021? What does this ramping up of semiconductor capabilities mean for the world?
Today, semiconductors are ubiquitous—whether it’s the device on which you’re streaming this episode, the drive assist or safety features of a car, or aerospace and defense equipment. In the last couple of years there has been a dearth of semiconductor supply. The semiconductor shortage today can be attributed to supply chain disruptions and several geopolitical factors that have their origins in the early days of COVID-19. Realizing the importance and potential of semiconductors, countries around the world, including India, have been investing in the semiconductor capabilities. In December 2021, the Indian government unveiled a Rs 76,000 crore scheme to boost semiconductor manufacturing, chip design and assembly, and testing and packaging (ATP) of chips.
In this episode of Interpreting India, G S Madhusudan joins Konark Bhandari to take a closer look at the Indian government’s semiconductor policy and the country’s potential in the space. What have governments across the world been doing to strengthen production capability? How do they compare with India’s semiconductor policy of December 2021? What does this ramping up of semiconductor capabilities mean for the world?
Episode Contributors
G S Madhusudan is the CEO and Co-Founder of InCore Semiconductors, India’s first Processor IP company. A technology entrepreneur with more than 30 years of experience in creating start-ups, G S Madhusudan is also committed towards engineering diverse software and hardware products, managing R&D labs and is intricately involved in technology/product strategy development.
Konark Bhandari is an associate fellow with Carnegie India. He is a lawyer who has researched on certain areas in the digital economy, focusing primarily on approaches to antitrust regulation of companies in the digital realm.
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Additional Reading
We Will Be Competitive With Equivalent ARM Cores, Better In Some Respects Perhaps Lagging In One Or Two Areas by G S Madhusudan
IIT-Madras Powers Up a Desi Chip by G S Madhusudan
Takeaways from the 2021 Global Technology Summit by Konark Bhandari
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Transcript
Konark
Hello and welcome back to interpreting India, as the world looks hopefully to emerge in the shadow of the coronavirus pandemic,
Konark
2022 has so far been defined by another variant of the COVID-19 virus, vicarious geopolitical relations, and a rapidly evolving technological landscape.
Konark
This season, we at Carnegie India are examining many of the challenges and opportunities that India will confront in the coming decade.
Konark
I'm your host Konark Bhandari and this week we're discussing semiconductor policies.
Konark
Today, semiconductors are ubiquitous, whether it is a device in which you are streaming this episode, the driver assist or safety features of a car
Konark
Or aerospace or defense equipment in the last couple of years there has been a dearth of semiconductor supply.
Konark
The semiconductor shortage today can be attributed to supply chain disruptions and several geopolitical factors that had their origins in the early days of COVID 19.
Konark
Realizing the importance and the potential of semiconductors, countries around the world, including India, have been investing in semiconductor capabilities. In December 2021, the Indian government unveiled the 76,000 crore rupees scheme to boost semiconductor manufacturing, chip design and assembly and testing and packaging of chips.
Konark
In this episode of Interpreting India, we will take a closer look at the Indian government semiconductor policy and the country's potential in this space.
Konark
What have governments across the world been doing to strengthen production capability and how do they compare with India semiconductor policy of December 2021?
Konark
What does this ramping up of semiconductor capabilities mean for the rest of the world?
Konark
To help us navigate some of these questions we have with us today, Mr. G S Madhusudan.
Konark
Mr. G S Madhusudan is the CEO and co-founder at InCore Semiconductors.
Konark
India’s first processor IP company, a technology entrepreneur with more than 30 years of experience in creating startups.
Konark
Mr Madhusudan is also committed towards engineering diverse software and hardware products, managing R&D labs, and it's intricately involved in technology product and strategy development.
Konark
Mr Madhusudan, Welcome to interpreting India, delighted to have you with us.
G S Madhusudan
Thank you for inviting me, glad to be here.
Konark
Let us begin by understanding what are the key factors for India to make a massive push for having a successful semiconductor industry?
Konark
Now I've chosen the words there carefully and the words I used there are key factors.
Konark
We'll get to the semiconductor policy a bit later in the course of the podcast, but what would be the factors?
Konark
So you know, people usually harp upon things like tech partnerships, infrastructure, talent, pool, ease of doing business, you know, supplier ecosystem.
Konark
But what do you think are the key factors?
G S Madhusudan
Typically, we tend to overcomplicate things, right?
G S Madhusudan
Ignore everything that you know about this
G S Madhusudan
and concentrate on just two things,
G S Madhusudan
There are really two things that matter,
G S Madhusudan
Local consumption of semiconductors and exporting stuff that is manufactured here, right?
G S Madhusudan
Both have different issues that stand in the way of India succeeding.
G S Madhusudan
Local consumption always depends on the amount of products being consumed. In India five years ago, local consumption was insignificant in terms of TV's or mobile phones and all of that
G S Madhusudan
But that is history Right?
G S Madhusudan
We consume enormous amount of electronics products.
G S Madhusudan
Right, so demand for local semiconductors. Is there everything from parts in mobile phones, TV's to washing machines to fans and all of that?
G S Madhusudan
You don't have to go to the high end super duper mobile phone chips and all that, right?
G S Madhusudan
Tiny little controllers sitting in the fans and all of that, so we need to understand where the local demand is.
G S Madhusudan
Especially in terms of volume.
G S Madhusudan
And figure out what will it take to create local products?
G S Madhusudan
That is what it is
G S Madhusudan
The second is export, we keep talking about fabs, but electronics export is a lot more than just fabs correct?
G S Madhusudan
If you take a typical $10 semiconductor,
G S Madhusudan
The fab cost is probably $2.00 Max. Their imports depending on how complex it is
G S Madhusudan
The rest of it comes in intellectual property in terms of packaging
G S Madhusudan
in terms of R&D expenses and engineering expenses.
G S Madhusudan
So, if I were to design chips locally and have local packaging plants which are coming without having a single fab in the country, I can still capture 80% of the value.
G S Madhusudan
If you capture 80% of the value you’re there, right?
G S Madhusudan
So you don't need to have a fab thrust to have a thriving local semiconductor industry.
G S Madhusudan
Qualcomm, Apple, Broadcom, AMD all of these are big names in the US.
G S Madhusudan
None of them own their own fabs
G S Madhusudan
Yet the products that are designed are considered the American products, in spite of the fact
G S Madhusudan
That the TSMC in Taiwan probably is.
G S Madhusudan
A major leading thing, right?
G S Madhusudan
So, uh, fab is not a necessary condition to have a thriving local industry.
G S Madhusudan
There's a lot of other factors at play, right so
G S Madhusudan
We kind of need to recognize that
G S Madhusudan
And if you take low-cost semiconductors so semiconductors costing below $20.
G S Madhusudan
It is no longer viable to design and manufacture these in the West.
G S Madhusudan
Uh, so, and it can only be kind of shifted to India or China.
G S Madhusudan
No other country when Taiwan to some degree
G S Madhusudan
Because we also need things like documentation, technical support, field application support.
G S Madhusudan
All of that right it requires a lot of manpower also
G S Madhusudan
Semiconductor support is an inherently manpower-intensive industry.
G S Madhusudan
Also it's not just manufacturing
G S Madhusudan
As much services industry as manufacturing India in fact is better suited for that than China.
G S Madhusudan
So both in terms of local consumption
G S Madhusudan
And in terms of export
G S Madhusudan
We need to recognize what do we consume locally, and what can we export.
G S Madhusudan
Right, once you decide that these are
G S Madhusudan
The three thrust areas then
G S Madhusudan
You do the policy to figure out what is required to ramp up?
G S Madhusudan
And we've kind of got the card backwards.
G S Madhusudan
We're looking at fabs and then figure out what we can do with fab right?
G S Madhusudan
You should decide what products India can build for the local market and for the export market and decide what kind of ecosystem
G S Madhusudan
We need to create
G S Madhusudan
Here we already may have a lot of ecosystem components, right?
G S Madhusudan
What is missing in and stuff
G S Madhusudan
Yeah, in that respect high end fab is should be low priority item
G S Madhusudan
In fact, old fabs, 180 nanometer, 300 nanometer, 90 nanometer fab small optical fabs, Gallium Nitride fabs, all of that matters.
G S Madhusudan
Most of the world semiconductor consumption is still what I call ancient technology.
G S Madhusudan
So ignore the glamour
G S Madhusudan
And focus on the bread and butter
G S Madhusudan
How many of us go around marrying models and stuff?
G S Madhusudan
I mean we all marry none of the people and have happy successful lives
G S Madhusudan
Same thing applies to semiconductors
G S Madhusudan
I don't know why glamour has to figure so prominently in semiconductors, semiconductors are boring, solid hardcore engineering.
G S Madhusudan
Glamour has no role to play in it
G S Madhusudan
and the instant you introduce glamour, everything goes for a toss
G S Madhusudan
So it's simple to get an industry here
G S Madhusudan
it's not that difficult, we just need to focus on what we can consume, what we can export and go about it
Konark
So many things to unpack in that Mr Madhusudan Ha
Konark
We spoke about exporting it, so I'll just get to get to this point, right
Konark
Now you know
Konark
How would India's trade partnerships in this regard hurt or you know help or stalls
Konark
Success in this in this particular area, I mean India is missing from the ARCEP
Konark
India is not a part of, you know the TPP.
Konark
How would you, possibly you know, position India if it is to export its semiconductor successfully
Konark
How would that
Konark
How would that look like?
G S Madhusudan
See we keep talking about atmanirbharta
G S Madhusudan
But before atmanirbharta you need atmavishwas, which is what is lacking.
G S Madhusudan
We don't need trade partnerships.
G S Madhusudan
We don't need to give a damn.
G S Madhusudan
About the world, we can ignore most of these things.
G S Madhusudan
You create great products here.
G S Madhusudan
You can sell those products on the strength of those products.
G S Madhusudan
We are a civilizational entity,
G S Madhusudan
We are not just a chota mota country right?
G S Madhusudan
That's why I said low cost
G S Madhusudan
Semiconductors below $20-25. You do these manufacturing volume
G S Madhusudan
You can get the markets.
G S Madhusudan
Ultimately Uh, if BMW wants chips
G S Madhusudan
It will buy from the
G S Madhusudan
Best supplier at the best price.
G S Madhusudan
Irrespective of whether we have
G S Madhusudan
A trade agreement with Germany or not
G S Madhusudan
See all these trade agreements partnerships
G S Madhusudan
Is that compensation for perceived weakness on our part?
G S Madhusudan
I frankly think all trade agreements are a waste of time.
G S Madhusudan
Right, focus on building great products.
G S Madhusudan
See what the country lacks.
G S Madhusudan
The reason why we are.
G S Madhusudan
Lagging, and I've no idea why we make great cars.
Right?
G S Madhusudan
We can't conceptualize good products and create them.
G S Madhusudan
Because we're used to engineering other peoples designs rights, correct?
G S Madhusudan
It's very tough.
G S Madhusudan
It's next to impossible to
G S Madhusudan
Find a good VP of Marketing for semiconductors in India.
G S Madhusudan
You're gonna get VP of engineering, right?
G S Madhusudan
So we need to learn the art of conceptualizing and creating products, finding out market niches and stuff.
G S Madhusudan
Once you do that
G S Madhusudan
I'm dead serious, I see, especially when it comes to all the trade agreements.
G S Madhusudan
First thing they do is try to impose patents on us
G S Madhusudan
I've been fighting patent battles on behalf of Indian companies in Delhi High Court
G S Madhusudan
So, every trade agreement I have come so far is negative for India
G S Madhusudan
So my advice, stay out of all of those agreements.
G S Madhusudan
But WTO for me in the IT
G S Madhusudan
Segment is a, uh
G S Madhusudan
It's a waste of time, yeah, and see you should have
G S Madhusudan
High tariffs on all of that I agree right, kind of high customs duties.
G S Madhusudan
But we kind of go overboard in the sense that we need to have alliances and relationships for us to thrive.
G S Madhusudan
But that's just me talking.
G S Madhusudan
I prefer to stand on my own two
G S Madhusudan
Shoes without help from anybody else.
G S Madhusudan
India can do the same
G S Madhusudan
I frankly don’t understand the
G S Madhusudan
Need of the rationale for partnerships?
G S Madhusudan
It holds us back.
Konark
I'll just comment to the second part of your initial statement about
Konark
You know
Konark
First is of course creating demand which is already there on the second is exporting stuff which is manufactured in India.
Konark
What do you say to those people who say that by focusing on the more mature nodes of the semiconductor ecosystem, we're sort of compromising our edge on this to be strategic tech part of the ecosystem
G S Madhusudan
What strategic part?
G S Madhusudan
I'm an advisor to the Ministry of Defense informally and stuff.
G S Madhusudan
I know what
G S Madhusudan
Strategy we have and stuff
G S Madhusudan
I mean, when it comes to strategic tech, I trust people who actually design semiconductors for a living.
G S Madhusudan
There is a decoupling between people's ability to actually design semiconductors and their desire to have a public opinion.
G S Madhusudan
There is almost 0 overlap between the two.
G S Madhusudan
So when people say things like that just ignore it.
G S Madhusudan
Ask them if
G S Madhusudan
How many chips they're designed in their life?
G S Madhusudan
If the answer is less than five, just ignore the opinion.
G S Madhusudan
Look, we need to crawl before we can walk and before we can run.
G S Madhusudan
Running semiconductor plants needs a huge ecosystem.
G S Madhusudan
Things like gases, purified water, high precision, cooling
G S Madhusudan
So I have written enough notes. What I said was look you start 20 small fabs costing between 30 Million
G S Madhusudan
To a billion and a half
G S Madhusudan
then you will create a whole cadre of fab engineers who
G S Madhusudan
Know how to run a plant
G S Madhusudan
Once you have that that will take about 5 to 8 years or so.
G S Madhusudan
Slowly you can
G S Madhusudan
Go on to
G S Madhusudan
The bigger nodes, but seriously OK, I want to
G S Madhusudan
Do A7 nanometer plant now Who's going to give you technology?
G S Madhusudan
The PLA scheme has been
G S Madhusudan
Announced how many people have volunteered with seven nanometer, even 12 nanometer technology no
G S Madhusudan
We'll get 65 and 14 stuff
G S Madhusudan
Look at the consumption
G S Madhusudan
Of what is getting consumed in the world just not in India.
G S Madhusudan
Oh every fan, every air conditioner, every washing machine.
G S Madhusudan
Uh, and what's called the DC motor now, right for energy efficiency, right?
G S Madhusudan
You've got these BLDC fans which are coming.
G S Madhusudan
One manufacturer I know alone does support 7 Lakh fans is probably hitting
G S Madhusudan
like a Million fans a month each of them requires a processor.
G S Madhusudan
XUV700 has between, I don't know, between 60 to
G S Madhusudan
170 processors, each mirror has got one tiny little processor
G S Madhusudan
Running there, right?
G S Madhusudan
There's a huge demand of old generation parts that is needed.
G S Madhusudan
In fact, I jokingly suggested to Matey that you should penalize somebody if they come with a 7 nanometer or 12 nanometer.
G S Madhusudan
Right? Please focus on 180, 90, 65, 40
G S Madhusudan
Along with gallium nitride for RF and all that.
G S Madhusudan
I mean, forget the big semiconductor.
G S Madhusudan
I need power converters for motor starters
G S Madhusudan
You know how many motors we make in the world
G S Madhusudan
India can be
G S Madhusudan
One of the leading suppliers of electric motors on the planet, rightCoimbatore for example
G S Madhusudan
Is a leading motor supplier
G S Madhusudan
That stuff right that requires power electronics.
G S Madhusudan
It's a bulk electronics and stuff that also requires motor controller chips and all that.
G S Madhusudan
There are huge volumes to be, uh
G S Madhusudan
You're not going to get a 7 nanometers all nice.
G S Madhusudan
Saying we need strategic Tech somebody 'cause there are only three guys on the planet with seven nanometer tech
G S Madhusudan
There is Samsung, there is TSMC
G S Madhusudan
And there’s Intel.
G S Madhusudan
As far as I know, in my conversations with all of them in over the past month or so, none of them are waiting in a line to hand over their tech to us.
G S Madhusudan
So keep dreaming
G S Madhusudan
Or we can get practical and get fabs running
Konark
So the obvious implication of this, as you mentioned earlier, is also to focus on the more mature nodes and Mr. Madhusudan a conversation I've had with you earlier as well. You’ve said focusing on the 70 nanometer range in the 45 to 70 nanometer range.
G S Madhusudan
Yeah, for basically 180, 90, 64 and 40
G S Madhusudan
Four important notes.
Konark
OK, so I just want to, you know, take a deep dive into a recent piece of legislation which was covered more extensively by the media, which is the passage of the US Chips Act.
Konark
But just a few days back when the US Congress, so one of the provisions in that essentially forbids the companies who are the beneficiaries of.
Konark
Any you know?
Konark
Funding from the government to
Konark
Expand any facility in China which is basically below 28 nanometers, but it allows them at the same time significantly, but it allows them as to sort of, you know, continue expanding production in the above 28 nanometer range.
Konark
Does this make India's task more tougher there was this belief earlier that this decoupling of the technical systems would have would essentially benefit India?
Konark
But given the given that the legislation essentially says that no, you know China will be a location where these enterprises can indeed pursue the manufacturing of more mature nodes.
Konark
Does this make the competition for India more stiff?
G S Madhusudan
It does see this is what I'm saying, right?
G S Madhusudan
If you've got a thriving local industry, you can.
G S Madhusudan
Afford to ignore all of this.
G S Madhusudan
When it comes to foreign policy, the Chinese Government actually invites me every year for a keynote address.
G S Madhusudan
So I don't know why, but they call me.
G S Madhusudan
I go there, they treat me very nicely and stuff
G S Madhusudan
I've been dealing with China.
G S Madhusudan
For more than two decades.
G S Madhusudan
Good stuff, lots of friends over there, but mostly Taiwanese Americans.
G S Madhusudan
Many Chinese are remotely, but we know the industry there pretty well.
G S Madhusudan
Because I’m in the sector right
G S Madhusudan
But even after two and a half
G S Madhusudan
Decades I can't figure.
G S Madhusudan
Them out.
G S Madhusudan
Uh, my standard policy with China.
G S Madhusudan
Is just ignore it.
G S Madhusudan
Just if you got a.
G S Madhusudan
Map in your thing just.
G S Madhusudan
Like remove it from the map, and it's not positive or negative.
G S Madhusudan
I'm not being.
G S Madhusudan
Negative about China?
G S Madhusudan
And stuff right?
G S Madhusudan
Just just pretend it doesn't.
G S Madhusudan
Exist and do your own thing.
G S Madhusudan
And stop getting worried about what the American policy is with German policies. With the Taiwanese policies in Japanese policy, we have 1.4 billion people.
G S Madhusudan
With The right amount.
G S Madhusudan
Of local consumption we can call the shots.
G S Madhusudan
We should look at what is pragmatic and focus on that.
G S Madhusudan
China simply doesn't.
G S Madhusudan
figure on our radar we.
G S Madhusudan
Don't even think about it.
G S Madhusudan
Can we export to China?
G S Madhusudan
Probably not.
G S Madhusudan
They have a local thriving industry.
G S Madhusudan
There's nothing much we can do over there, but.
G S Madhusudan
Engagement with China can happen.
G S Madhusudan
Only if the Chinese want to engage us, right?
G S Madhusudan
Like it's, it's always been one sided.
G S Madhusudan
They need to respect us even when.
G S Madhusudan
They respect us, probably take another 500
G S Madhusudan
1000 years or so.
G S Madhusudan
Then we can engage with that, but in the interim, like in the next 20-30 years, we should.
G S Madhusudan
Focus on the local market.
G S Madhusudan
80% local market 20-30% export.
G S Madhusudan
I tell you semiconductors when you actually sell them.
G S Madhusudan
Just go to see.
G S Madhusudan
When you buy chips, especially low end chips.
G S Madhusudan
That you put in fans, motors and.
G S Madhusudan
All of that.
G S Madhusudan
Invariably you go.
G S Madhusudan
To NXP, which.
G S Madhusudan
Is X Phillips, Motorola or two taxes and Smiths?
G S Madhusudan
Why excellent data sheets?
G S Madhusudan
Good manuals.
G S Madhusudan
Proper documentation, good field application support.
G S Madhusudan
You write to them.
G S Madhusudan
They'll give you samples.
G S Madhusudan
Easy parts availability.
G S Madhusudan
Right, the fact that the product.
G S Madhusudan
Is world class is almost secondary?
G S Madhusudan
It's the people based, so semiconductor when it's customer facing.
G S Madhusudan
Inherently it's a services opportunity.
G S Madhusudan
It's not just a manufacturing opportunity.
G S Madhusudan
We miss out on.
G S Madhusudan
That and because.
It's a services.
G S Madhusudan
Opportunity we can run rings around China.
G S Madhusudan
Nobody in their right mind would go.
G S Madhusudan
Buy a chip from China if you want.
G S Madhusudan
To experiment with it, right?
G S Madhusudan
There will be.
G S Madhusudan
Great chips, I know.
G S Madhusudan
I'm not downplaying the Chinese, but they're not really known for providing great manuals providing good 24/7 customer support.
G S Madhusudan
Having local field application support officers and.
G S Madhusudan
All of that, right?
G S Madhusudan
So semiconductors Is inherently a customer facing function.
G S Madhusudan
We ignore that aspect of it.
G S Madhusudan
At our own peril, The thing is.
G S Madhusudan
Just some mass manufacturing thing that you do and.
G S Madhusudan
Magically itself, so it doesn't.
G S Madhusudan
Sales and support is a major major part of the semiconductor industry and the guys who succeed in the market are the people who.
G S Madhusudan
Get the support and services right.
G S Madhusudan
It's it's our opportunity to blow.
G S Madhusudan
India can become the number one.
G S Madhusudan
Supplier of low cost semi conductors to the world.
G S Madhusudan
Very very easily.
G S Madhusudan
If you put a mind to it.
Konark
Right?
G S Madhusudan
It's our battle to lose
Right?
Konark
I'll just pick up on that thread.
Konark
And we spoke about how India?
Konark
Can sort of complement its?
Konark
I think design and fabrication ecosystem with the services component as well.
Konark
Do you think this has been tackled and addressed in the recent policies of the government?
Konark
Has there been a focus on sort of augmenting the services ecosystem?
Konark
I mean we have the chips to start up scheme which is focusing
Konark
on training 83,000 people or so, but that's mostly engineering side. There is not much of a focus on the service side, so do you think that was?
G S Madhusudan
There isn't.
G S Madhusudan
There isn't any in.
G S Madhusudan
Fact there's no focus on.
G S Madhusudan
The product side itself correct?
G S Madhusudan
So among the.
G S Madhusudan
Chips that we're doing.
G S Madhusudan
One of the things.
G S Madhusudan
That InCode has done is actually.
G S Madhusudan
Help bring together all the intellectual property suppliers in India.
G S Madhusudan
So when we.
G S Madhusudan
we have our first customer and the unique thing is it's a simple chip, not state-of-theart.They are like 150-200
G S Madhusudan
megahertz process that anybody can do right like 20 countries in the world.
G S Madhusudan
Can do it what
G S Madhusudan
Is unique about it is that every intellectual property in that
G S Madhusudan
Chip comes from India.
G S Madhusudan
We're not using anything from outside, correct
G S Madhusudan
So the government really needs to have a thrust on how do you create product companies?
G S Madhusudan
What's the?
G S Madhusudan
Help they need.
G S Madhusudan
We need things like certification labs.
G S Madhusudan
We need packaging units and all of that right.
G S Madhusudan
The whole product development lifecycle is what is missing
G S Madhusudan
Like I said, in a $10 chip the fab cost is only buck and a half or two
G S Madhusudan
The rest of it.
G S Madhusudan
Is what India needs to have.
G S Madhusudan
Right, for example, auto qualification. We're one of the world's leading auto manufacturers, right? So I make.
G S Madhusudan
An automotive chip, how do I qualify it?
G S Madhusudan
Reliability testing otherwise Mahindra or.
G S Madhusudan
Tata won't buy it.
G S Madhusudan
Correct, I lack the testing.
G S Madhusudan
Infrastructure to qualify for auto mode.
G S Madhusudan
Similarly, other certification, the whole bunch of things.
G S Madhusudan
That need to happen.
G S Madhusudan
So I'm not saying.
G S Madhusudan
The government focus is wrong, but there are a.
G S Madhusudan
Lot of other things that need to happen before.
G S Madhusudan
We can become a viable semiconductor product country.
G S Madhusudan
See, we can't just be a.
G S Madhusudan
Low cost supplier to the world, right?
G S Madhusudan
The thrust should be.
G S Madhusudan
If you buy a chip on the planet.
G S Madhusudan
Chances are it comes out of India.
G S Madhusudan
Conceptualized, created, manufactured in India with.
G S Madhusudan
0 support from any place on the planet except foundries
G S Madhusudan
Easily can happen in the
G S Madhusudan
Next five years.
G S Madhusudan
Not a problem at all.
Konark
But that that is quite the contrarian view.
Konark
Mr madhusudan.
Konark
You know, given all that we have read in the press about, you know partnerships, and given all that.
Konark
We've read about how you can only succeed in one state of the ecosystem if you try to do too many things at the same time, it will probably not succeed, but I mean, we are clearly laid out, you know a road map here, in the sense that.
Konark
You’ve identified certain things the government can do, indeed, to set the ball rolling in this front
Konark
So yeah, the point is well.
Konark
Taken in in an.
Konark
Earlier conversation with you again you had.
Konark
Sort of spoken about.
Konark
You know that.
Konark
There needs to be a concrete goal in terms of, you know, a production target or something you want to elaborate more on that.
G S Madhusudan
Yeah, see I'm I'm I'm a.
G S Madhusudan
Chap who believes in having.
G S Madhusudan
Taking a small task.
G S Madhusudan
1st and.
G S Madhusudan
Executing it to perfection correct?
G S Madhusudan
So like I said, you take one thing you.
Just take a.
G S Madhusudan
Motor controller chip and say an electricity meter chip right?
G S Madhusudan
These things sell in tens of millions every year in India, so the volumes are guaranteed.
G S Madhusudan
So I wish the government would say, OK, we'll just.
G S Madhusudan
Take 2 chips, one that.
G S Madhusudan
Goes into fans and AC's.
G S Madhusudan
And refrigerators and one.
G S Madhusudan
That goes into electricity meters.
G S Madhusudan
Right, so demand for both of these is guaranteed we I think our.
G S Madhusudan
Demand is what?
G S Madhusudan
That's 25 crore electricity meters
G S Madhusudan
Or something like that, like huge, right?
G S Madhusudan
So we actually made a list of five chips.
G S Madhusudan
Each chip will probably.
G S Madhusudan
Cost you anywhere from 50 Crores to 100
G S Madhusudan
Crores to design, manufacture, bring into production.
G S Madhusudan
So you're talking about an overall investment of.
G S Madhusudan
500 Crores which is nothing
G S Madhusudan
If you invest this with 500 Crores essentially you.
G S Madhusudan
Can start selling.
G S Madhusudan
Something between 20 million to 100.
G S Madhusudan
Million chips in India, right?
G S Madhusudan
All of these five chips you pick two.
G S Madhusudan
And take it through the cycle that.
G S Madhusudan
I'm talking.
G S Madhusudan
About and see what?
G S Madhusudan
Is lagging in India?
G S Madhusudan
Right, you make a success of these two chips.
G S Madhusudan
Then the confidence builds itself correct
G S Madhusudan
While I'm talking, it's still all talk
G S Madhusudan
There still doesn't produce any chips in volumes right to get to the stage where we can trust ourselves you.
G S Madhusudan
Need to take one chip
G S Madhusudan
take it to production.
G S Madhusudan
I know all the wrinkles and then.
G S Madhusudan
You know what parts?
G S Madhusudan
Of the ecosystem are lagging in India.
G S Madhusudan
Then you use government schemes to.
G S Madhusudan
Fill the gaps correct?
G S Madhusudan
So we need to do.
G S Madhusudan
A dry run with one chip get into.
G S Madhusudan
Volume then?
G S Madhusudan
Do the second chip.
G S Madhusudan
Once you have done two chips then you multiply.
G S Madhusudan
Say we'll do five more right?
G S Madhusudan
So you gradually build it.
G S Madhusudan
And you start with the lower end of the chain
I think.
G S Madhusudan
The chips can be cost.
G S Madhusudan
Effective if they're.
G S Madhusudan
Not OK, give a 5-10%.
G S Madhusudan
Subsidy or something?
G S Madhusudan
So typically, for example, electricity meter chips sell for about $0.90 in the market right? Which goes into single Phase meters
G S Madhusudan
Three phase meter chips I think are a $1.20 or something
G S Madhusudan
I'm talking dollars.
G S Madhusudan
So if the Indian chip say.
G S Madhusudan
10-15 cents more. That's like 7-8 rupees. That's OK a meter costs
G S Madhusudan
1500 rupees or something, right? You can easily say a subsidy of ₹40 per chip. Then you get a volume of million.
G S Madhusudan
After that we won't give you subsidies.
G S Madhusudan
Right, we need to get that. So we need to have a razor sharp focus on saying OK by 2025 I will have two Indian chips selling a volume of.
G S Madhusudan
10 million a piece a year
G S Madhusudan
Very hard concrete goal.
G S Madhusudan
Don't get distracted with anything else.
G S Madhusudan
Take it through to fruition and once Indian design chips are being manufactured in millions then everybody gets confident that we can.
G S Madhusudan
Do other things.
G S Madhusudan
Otherwise, we are in this endless talk cycle, right
G S Madhusudan
This there is no difference from a TV talk show except the talk show their tests will be acerbic.
G S Madhusudan
Uh, our semiconductor conversations are more polite.
G S Madhusudan
But in terms of.
G S Madhusudan
Lack of any useful information.
G S Madhusudan
Both are identical.
G S Madhusudan
Just keep talking, talking, talking right.
G S Madhusudan
I Want to see chips?
G S Madhusudan
The government is doing.
G S Madhusudan
See, I'm not, I'm not.
G S Madhusudan
Blaming the government.
G S Madhusudan
Here, right?
G S Madhusudan
You can't expect the government to create a semiconductor industry all by itself, commented, giving enough incentive
G S Madhusudan
It’s up to the private sector.
G S Madhusudan
To step up to the plate.
G S Madhusudan
And see what can be done.
Correct?
G S Madhusudan
That it has to be.
G S Madhusudan
A partnership it can't be a
G S Madhusuda
Government does everything the government does have to play a role.
G S Madhusudan
If you look at how the semiconductor industry award in all countries, the government, U.S. government, Taiwanese government, Japanese Government.
G S Madhusudan
There is a significant role.
G S Madhusudan
But when they started.
G S Madhusudan
It was very nascent, so that degree.
G S Madhusudan
Of government support is.
G S Madhusudan
Needed, that's not the case now.
G S Madhusudan
But the government can help, I guess in.
G S Madhusudan
Giving Chip mandates, for example, if.
G S Madhusudan
They say that OK for electricity meters we will.
G S Madhusudan
Favor Indian chips only.
G S Madhusudan
Then the private sector will take the financial risk
G S Madhusudan
Come on, don't tell me we don't have enough money in the country that we.
G S Madhusudan
Can't take a 70 Crore bet on one chip.
G S Madhusudan
I mean, if I.
G S Madhusudan
Look out my.
G S Madhusudan
Window in the streets here I'm.
G S Madhusudan
Probably seeing the 3-4.
G S Madhusudan
Probably about.
G S Madhusudan
Seven crores worth of cars
G S Madhusudan
I mean, there's one.
G S Madhusudan
Maybach parked outside, I think.
G S Madhusudan
The neighbor has some money, there's one Jaguar.
G S Madhusudan
1E class Mercedes I think there’s an S class over there
G S Madhusudan
It it adds up, right so?
G S Madhusudan
I go to the window I see like.
G S Madhusudan
About 10-15 crores worth of cars
G S Madhusudan
so that's obviously there's money available to burn.
G S Madhusudan
70 Crores to take a gamble on.
G S Madhusudan
A single chip which can sell in volumes.
Konark
Right, so do you think that the government's incentive structure is a bit lopsided? Should we be giving more incentives to companies which are focused more on the mature node segment or?
Konark
Should we be?
G S Madhusudan
Terms of the fab policy I have told Matey, forget about 7
G S Madhusudan
Nanometers focus on the other ones.
G S Madhusudan
I can understand where they're coming from, but don't read too much into it.
G S Madhusudan
I I'm not a firm believer in too much of government incentives, right?
G S Madhusudan
I would rather the government works on creating demand.
G S Madhusudan
We need a pull instead.
G S Madhusudan
Of a push, correct?
See if I as.
G S Madhusudan
A private sector guy.
G S Madhusudan
I know there is.
G S Madhusudan
A market for 50 million power meter chips I.
G S Madhusudan
Will go ahead and make the investment.
G S Madhusudan
So there needs.
G S Madhusudan
To be a bit of a demand pull.
G S Madhusudan
In terms of mandates and stuff, discussions are.
G S Madhusudan
Happening, I'm hoping some government policy will come.
G S Madhusudan
By the end of the year or so.
Konark
I think for the larger part of this podcast you have thus far focused on the fabrication part.
Konark
Let's move over to the design ecosystem for a bit, and if you can just briefly have your thoughts on the DLI scheme which has come out.
Konark
I mean, it's been appreciated in various quarters, but there are some concerns that the amount being promised under the scheme is not sufficient enough and what to do?
Konark
When the money dries up, you know we'll have any VC firm come and essentially pick up the tab and basically carry the funding.
Konark
Forward, or you know there's some money which is being promised under the scheme.
Konark
Is it something which is reimbursed, or is it something that's promised upfront so you know we'll be happy?
I I think it's partly this.
G S Madhusudan
Scheme is also being redone or something is what I heard.
G S Madhusudan
I mean, we also plan to apply for it, but we've not applied
G S Madhusudan
Because we just.
G S Madhusudan
Wanted to get a few things right before.
G S Madhusudan
We applied for a.
G S Madhusudan
See, DLI is one component of it.
G S Madhusudan
One of
G S Madhusudan
The concerns I have.
G S Madhusudan
And I've told Michael also.
G S Madhusudan
How do you I wish?
G S Madhusudan
The DLI scheme a little more focus in terms.
G S Madhusudan
Of see whenever.
G S Madhusudan
Subsidies are given.
G S Madhusudan
I'm not an anti subsidy.
G S Madhusudan
Or I'm probably slightly more pro subsidy, but I prefer focused subsidies and I would like to have measurable outcomes when it comes to subsidies and grants, right?
G S Madhusudan
There is nothing wrong with the subsidy per say.
G S Madhusudan
Provided you have.
G S Madhusudan
Some goal in.
G S Madhusudan
Mind and you at least achieve 80.
G S Madhusudan
Percent of that goal
G S Madhusudan
So what is the?
G S Madhusudan
Incentive for DLI what is?
G S Madhusudan
It that you hope? Ok
G S Madhusudan
You spend I think DLI was some 500 Crores or two lots of 500-1000 Crores or whatever
G S Madhusudan
Let's assume 1000 Crores, right? You've spent 1000 Crores. It's not a huge amount of money, it's it's amount of money that's worthwhile experimenting. You spend that.
G S Madhusudan
1000 Crores
G S Madhusudan
How do you measure?
G S Madhusudan
The success of that 1000 Crores.
G S Madhusudan
What are success metrics what?
G S Madhusudan
Is it that you want to achieve?
G S Madhusudan
Do you want to create intellectual property?
G S Madhusudan
You want people creating Ethernet controllers so you know.
G S Madhusudan
The components that go into.
A chip, but.
G S Madhusudan
We already have IP suppliers in India who.
G S Madhusudan
Are not able to set
G S Madhusudan
Correct? Or are you looking for people who are creating SOCs?
G S Madhusudan
But if somebody created creates a chip?
G S Madhusudan
How is he going to sell it?
G S Madhusudan
OK, you give 50 crores and he designs
G S Madhusudan
A successful chip
G S Madhusudan
The problem in India?
G S Madhusudan
Is sales and marketing in terms of conceptualizing the.
G S Madhusudan
Part so I go to Matey.
G S Madhusudan
And say OK, this is my DLI aspect
G S Madhusudan
Who checks whether that's a viable product in the market?
G S Madhusudan
Matey recognizes that
G S Madhusudan
they're actually they're actually going.
G S Madhusudan
They're taking their own pace in the DLI, which is good.
G S Madhusudan
I appreciate the fact they're not rushing through with.
G S Madhusudan
It in trying to figure out how can we spend the money, but obviously somebody.
G S Madhusudan
Is going to ask.
G S Madhusudan
What happened after spending that money?
G S Madhusudan
Matey is very cognizant of that it is not an easy question to answer.
G S Madhusudan
I'm not claiming how.
G S Madhusudan
The answers my suggestion was have a far.
G S Madhusudan
More focused DLI scheme.
G S Madhusudan
It says OK, Ideally,
G S Madhusudan
I believe If I want to advise.
G S Madhusudan
I would say have DLI for specific parts.
G S Madhusudan
OK, have a DLI for energy meters have DLI for point of sale template chips right have a DLI
G S Madhusudan
For a security chip.
G S Madhusudan
There you can kind of measure the outcome and more importantly, the output can be used into products.
G S Madhusudan
So, uh, I think if DLI has more of a product focus in terms of products can get used both locally and abroad, then the government will get the bang for the buck.
G S Madhusudan
Otherwise, you'll still.
G S Madhusudan
Get returns, but it will be.
G S Madhusudan
More long term and fuzzy.
G S Madhusudan
And with the CAG, ask questions saying hey.
G S Madhusudan
We spend 2000 Crores, What happened?
G S Madhusudan
It's it's a very tough.
G S Madhusudan
One to answer, I'm not.
G S Madhusudan
Saying CAG is wrong or Matey is wrong, right?
G S Madhusudan
If you don't have well defined goals and saying it's a long-term goal, that is fine.
G S Madhusudan
That's another way.
G S Madhusudan
Of looking at it.
G S Madhusudan
Right, but those kind of.
G S Madhusudan
Investments you don't look at ROI.
G S Madhusudan
You basically say, OK, I'll.
G S Madhusudan
Spend 1000 crores to create an ecosystem and.
G S Madhusudan
As long as.
G S Madhusudan
The ecosystem gets created.
G S Madhusudan
You should be happy with it.
G S Madhusudan
So there the outcome is measured by.
G S Madhusudan
Number of design engineers out.
G S Madhusudan
Right whereas a more focused DLI will measure its success by.
G S Madhusudan
The number of chips that.
G S Madhusudan
Got created neither is wrong it, but you need to decide what is the outcome you desire by spending that 500-1000 Crores
G S Madhusudan
So there's no right or wrong answer, I'm just talking about measuring success metrics.
Konark
This brings me to my next question, which is sort of related to this topic of chip design.
Konark
You know, the export controls initiated a couple of years back from the.
Konark
USside.
Konark
have essentially led to the school of thought in China that we.
Konark
Should leapfrog it.
Konark
Because there is no way we can.
Konark
Possibly catch up with next 7 nanometer chips.
Konark
In the next 5-6 years. So there's talk about you know and Chinese companies indeed have sort of, you know, been quite dominant in the RISC-V foundation. I think I was going to get to that point do.
Konark
You see the rich pipeline.
G S Madhusudan
Yeah, that means I.
G S Madhusudan
Have been dominant but I have not seen too many Chinese chips come out.
G S Madhusudan
Yet and.
G S Madhusudan
See forget about RISC-V right, ARM Has been there for donkeys years correct? ARMS came in 1985 by the way.
G S Madhusudan
ARMs started as a BBC contest so it
G S Madhusudan
Have been there for a long time.
G S Madhusudan
Now you have a.
G S Madhusudan
Lot of ARM chips out of China.
G S Madhusudan
And stuff, but the dominant.
G S Madhusudan
Players are still Western players.
G S Madhusudan
I keep saying chips are about the services.
G S Madhusudan
That you offer.
G S Madhusudan
After you manufacture the chip, it's about the manuals.
G S Madhusudan
It's about the Technical Support.
G S Madhusudan
It's about having.
G S Madhusudan
A call center which properly answers your design questions.
G S Madhusudan
See, you're designing a UPS.
G S Madhusudan
You put a chip in there.
G S Madhusudan
It's not working as it's supposed to be you.
G S Madhusudan
Ask for the data sheet
G S Madhusudan
You've got a production deadline.
G S Madhusudan
You've got customers waiting.
G S Madhusudan
You need the help from the manufacturer to sort.
G S Madhusudan
Out the problem.
G S Madhusudan
Right, so if you're buying a chip, say for.
G S Madhusudan
₹250 from.
G S Madhusudan
A western vendor.
G S Madhusudan
And the Chinese guy gives you 150. Yes, you save ₹100.
G S Madhusudan
The UPS is selling for 10,000 bucks.
G S Madhusudan
If you hold up.
G S Madhusudan
Production you lose a lot more.
G S Madhusudan
So saving that 50 bucks is not.
G S Madhusudan
Worth it?
G S Madhusudan
If you don't get good support, correct.
G S Madhusudan
So if.
G S Madhusudan
Semiconductors are not this monolithic.
G S Madhusudan
Thing that you you put engineers into it.
G S Madhusudan
You can leave from right?
G S Madhusudan
Chip design manufacturing.
G S Madhusudan
Selling is a culture.
G S Madhusudan
It is that culture we.
G S Madhusudan
Need to imbibe from the West, not the technology.
Konark
There are still some benefits which are heavily doubted of the RISC-V architecture. Basically it uses you know for performing similar functions compared to X86 and ARM. It basically uses the less memory. It's open, close.
Oh no no no no no.
No no please.
G S Madhusudan
Don't buy, I'm.
G S Madhusudan
Here one of the when.
G S Madhusudan
I was at ID.
G S Madhusudan
There are the founding members.
G S Madhusudan
Of the consortium.
G S Madhusudan
All instruction set architectures are similar.
G S Madhusudan
The efficiency comes more from how you architect the chip rather than the ISA.
G S Madhusudan
What RISC-V gives is a nice clean business model where you don't have to pay royalties or there’s no control
G S Madhusudan
RISC-V is more.
G S Madhusudan
About a business model.
G S Madhusudan
Than technology.
G S Madhusudan
It is more democratic.
G S Madhusudan
So RISC-V is a cultural change in.
G S Madhusudan
A business change.
G S Madhusudan
It is not.
G S Madhusudan
A technology breakthrough
G S Madhusudan
You really need to get that, so, uh.
G S Madhusudan
RISC-V chip will not be more.
G S Madhusudan
Efficient than an ARM chip
G S Madhusudan
They'll all be identical.
G S Madhusudan
It will not consume less memory, it will.
G S Madhusudan
Not run faster it.
G S Madhusudan
Will run at the same speed as the ARM
G S Madhusudan
It Will consume the same amount of memory.
G S Madhusudan
Give and take a little here and there.
G S Madhusudan
The efficiency of the chip comes more in how a chip is architected, which has got nothing
G S Madhusudan
To do with the ISA
G S Madhusudan
So just going on to the RISC-V will not give you any benefit other than the fact that you don't have to pay royalty.
G S Madhusudan
You don't have to.
G S Madhusudan
Sign agreements, and all that you can do.
G S Madhusudan
Whatever you want it.
G S Madhusudan
Simply gives you more flexibility, but.
G S Madhusudan
You need a culture of designing.
G S Madhusudan
Products to leverage that flexibility correct?
G S Madhusudan
So unless we have a culture of conceptualizing and creating products India can't.
G S Madhusudan
Leverage RISC-V
G S Madhusudan
We’ll simply provide the cheap manpower.
G S Madhusudan
The rest of the World to create RISC-V chips, but the product sensors will be conceptualized and created by somebody else.
G S Madhusudan
I don't want that to happen right, I want.
G S Madhusudan
The products come out of India
G S Madhusudan
Well, so ideally if you want to give incentive, I would say.
G S Madhusudan
Give money to a bunch of IIM’s and other MBA institutions.
G S Madhusudan
Give a stipend of two
G S Madhusudan
Lakhs a month.
G S Madhusudan
And start creating.
G S Madhusudan
Product managers in the semiconductor sector.
G S Madhusudan
See, suppose OK you want to create a chip that will go into mobile phones.
G S Madhusudan
You need to figure out OK which part of the mobile phone?
G S Madhusudan
Do I target?
G S Madhusudan
What price point do I?
G S Madhusudan
Target there are.
G S Madhusudan
Four existing suppliers in the market.
G S Madhusudan
How do I?
G S Madhusudan
Leapfrog over there.
G S Madhusudan
What does my?
G S Madhusudan
Supply chain going to be be.
G S Madhusudan
What advantage do I?
G S Madhusudan
Have over the existing.
G S Madhusudan
How do I convince the customer solutions?
G S Madhusudan
From his chip with my chip, correct?
G S Madhusudan
These are the questions you need to answer if you want.
G S Madhusudan
To have a thriving local products.
G S Madhusudan
Designing the part is the easy portion.
G S Madhusudan
Selling it to a customer is a tough one.
Konark
So I mean, so far the conversation is very straightforward.
Konark
It seems to be that you know we don't need fancy fabs, we need more of you know a dedication to a particular product segment and sort of have a policy laying out the road map for people to participate.
Konark
In that we do not necessarily need RISC-V
Konark
But what we need is people who can sort of utilize it better in terms of their engineering talent and.
Konark
Even regarding the engineering talent, it needs to be more holistic with a focus on fund raising and you know, product management and marketing and all that.
G S Madhusudan
No, we don't need RISC-V
G S Madhusudan
See RISC-V gives us a business advantage, right?
G S Madhusudan
I am saying it doesn't give you a technical advantage compared to ARM
G S Madhusudan
It definitely gives India and China a business advantage because you're not beholden to anybody.
G S Madhusudan
Suppose you're doing a particular.
G S Madhusudan
Part say for a.
G S Madhusudan
Google Home, like speaker, right?
G S Madhusudan
And you come up with an innovation where you add 2 instructions to improve voice recognition quality.
G S Madhusudan
That is your intellectual property.
G S Madhusudan
So an Indian company building an SoC for a Google Home type speaker can rapidly innovate without paying royalties or being beholden to somebody else.
G S Madhusudan
So RISC-Vis.
G S Madhusudan
Very crucial to India’s success.
G S Madhusudan
But please look at it from the intellectual flexibility and the business flexibility it gives you.
G S Madhusudan
Not necessarily a technology or business technology advantage.
Konark
I see and you also spoke at length earlier in the podcast about, you know, sort of fighting patent battles in the Delhi High Court as well.
Konark
So is there any correlation with that observation and the fact that this pipe basically is royalty free?
G S Madhusudan
It is royalty-free, also RISC-V
G S Madhusudan
Companies typically don't assert patents there.
G S Madhusudan
Is also patent pool kind.
G S Madhusudan
Of stuff that is getting created to help RISC-V companies file patents
G S Madhusudan
I mean, that's why companies do file patents, but they.
G S Madhusudan
Typically use it.
G S Madhusudan
Defensive, fortunately, all the biggies who used to file patent wars have stopped very unusually Microsoft and Cisco, which used to assert.
G S Madhusudan
Patents and take people to courts have joined forces to create a patent free video standard, right? Talk about a 180 degree turn.
G S Madhusudan
Because I said that look if this is for all the video encoding, they're saying if everybody has to pay patent it's very tough to watch videos and browsers and stuff, right?
G S Madhusudan
I've written an article in Hindu.
G S Madhusudan
I am a avowedly anti patent even if you file a patent
G S Madhusudan
And it should be defensive.
G S Madhusudan
See patents existed not as a fundamental right, but as a government policy to accelerate innovation.
G S Madhusudan
Open source technology and open standards.
G S Madhusudan
Let’s say
G S Madhusudan
If I have proven.
G S Madhusudan
That you don't need to incentivize innovation with patents.
G S Madhusudan
Patents are a means.
G S Madhusudan
To an end.
If you can.
G S Madhusudan
Have innovation without patents.
G S Madhusudan
Why should you give a privilege to company?
G S Madhusudan
Especially in software.
G S Madhusudan
I'm talking only in the context of software patents and mathematical algorithm type patents, right?
G S Madhusudan
I'm not generalizing in terms of medicines and mechanical and stuff.
G S Madhusudan
That's an entirely different field line.
G S Madhusudan
I'm talking only narrowly about software and software related fields
Konark
I think I'll again harp back to the issue of partnerships, so this is something we had earlier spoken spoken about as well, which is, you know, the issue of prototypes we had mentioned.
Konark
They're really expensive, you know to secure, and maybe if there is a dollar partnership to begin with, we can probably start.
Konark
With you know TSMC
Konark
Or someone in Taiwan supplying it's.
Konark
We need maybe 100 prototypes and.
Konark
And the Indian ecosystem.
Konark
Sort of.
Konark
Takes it forward from.
Konark
There would you, would you get to.
G S Madhusudan
But that's not a partnership.
G S Madhusudan
That's a business arrangement, right?
G S Madhusudan
I mean, if you.
G S Madhusudan
Go to design 100 chips the government.
G S Madhusudan
Can block capacity with TSMC and say that.
G S Madhusudan
Hey, we'll give you.
G S Madhusudan
Guaranteed 100 chips.
G S Madhusudan
Whether you use it or not, and give me a reduced rate.
G S Madhusudan
Fine beyond that, why would you think TSMC or Intel or anybody will come to India with the sole purpose of improving the Indian ecosystem?
G S Madhusudan
No, I'm not saying they're wrong.
G S Madhusudan
They they are beholden to their shareholders, right?
G S Madhusudan
They have to show a return of equity on their shallow investment.
G S Madhusudan
It is not their job to create a semiconductor industry in India.
G S Madhusudan
That is our job.
G S Madhusudan
They will help us.
G S Madhusudan
There they are.
G S Madhusudan
Excellent companies are good technology companies.
G S Madhusudan
They're always willing for a good business.
G S Madhusudan
Relationship, but that business relationship.
G S Madhusudan
Has to make sense to them.
G S Madhusudan
So we need to.
G S Madhusudan
Say hey come do business in India because you benefit this way.
It's a capitalist.
G S Madhusudan
Society, right?
G S Madhusudan
They're not here for our benefit.
G S Madhusudan
They're there for the benefit of their shareholders.
G S Madhusudan
Nothing wrong.
G S Madhusudan
With that that's.
G S Madhusudan
How it should be?
G S Madhusudan
I'm not criticizing any of them.
G S Madhusudan
But we tend.
G S Madhusudan
To get a little emotional about this.
G S Madhusudan
I I have no idea why.
Konark
I think this ties in well with the point made earlier.
Konark
Also about deep taken strategic type, you know.
Konark
I mean, it's good to have it, but then it has to be profitable for the companies which seek to manufacture along those segments as well.
Konark
So the point is well taken, I think we're reaching the closer for allotted time, but I'll just end with this one question.
Konark
Mr madhusudan.
Konark
You've already mentioned at the beginning of this podcast that there should be.
Konark
Two things you know.
Konark
Creating an industry which has strong domestic demand and then exporting whatever is produced.
Konark
Overseas, but if there's any one overarching lesson you know after 30 years in the industry which you wish to sort of impart to Indian policymakers in the semiconductor ecosystem, or maybe even more than one, you know as many as you wish, what would be those key lessons?
G S Madhusudan
No, just one you you please figure out how to get Indian companies to create world class product the entire cycle right from parts of the manufacturing.
G S Madhusudan
Everything that you see in.
G S Madhusudan
The world Apple phones.
G S Madhusudan
So intel’s Evo laptops or LG OLED TV's or.
G S Madhusudan
Hyundai EV cars and stuff.
G S Madhusudan
They're all about products.
G S Madhusudan
The world is about products and brands.
G S Madhusudan
And if India needs to succeed, it needs to.
G S Madhusudan
Create world class products.
G S Madhusudan
It can be the.
G S Madhusudan
Lower end of the spectrum.
G S Madhusudan
You know what a big business rises in India?
G S Madhusudan
That's as glamorous as commodity as you can get.
G S Madhusudan
I know people who make hundreds of Crores out of selling rice.
G S Madhusudan
There is a family that.
G S Madhusudan
I knew which.
G S Madhusudan
The gentleman fell ill
G S Madhusudan
Unfortunately, he didn't make it.
G S Madhusudan
But I think he was in the ICU.
G S Madhusudan
For two years at apollo
G S Madhusudan
And there were some commodity traders or.
G S Madhusudan
Some kind of it's again, but they could they could afford.
G S Madhusudan
It just trading commodities.
G S Madhusudan
There's there's lots of money at the commodity end of the market, and similarly in semiconductors. It's not only the mobile phone chips and stuff that sell, it's also your little power converter chips. You know the little chip that go into your power adapter outside your 65 Watt adapters 100 watt adapters
G S Madhusudan
Those are big volumes.
G S Madhusudan
For every mobile phone that you buy, you.
G S Madhusudan
Probably end up buying 3 adapters, correct?
G S Madhusudan
All your volume volume that's the name.
G S Madhusudan
Of the game in.
G S Madhusudan
Semiconductors so.
Konark
So I guess the key take away if I can just put this in one particular phrase, it would be if you build it they will come.
Konark
If you build world class products, they will come.
Konark
You know you don't necessarily have to rely on partnerships trade while beneficial in the form of lower tariff barriers, would be welcome, but.
G S Madhusudan
Here we go.
Konark
You know, I think.
Konark
If you show a proficiency for creating world class products, the partnership will follow and I think on that note.
Konark
We will end the podcast Mr.
Konark
Madhusudan and thank you so much for your time.
Konark
It was indeed a pleasure to have you over and we look forward to having further conversations with you down the line as well.
G S Madhusudan
You're welcome.
Konark
We'll be back in two weeks with the new episode to make sure you don't miss it.
Konark
Be sure to subscribe on Apple Podcasts, Spotify, Stitcher or wherever you get your podcasts from.
Konark
To learn more about our research and team you can visit us at carnegieindia.org. You can also visit us on social media on Twitter.
Konark
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Konark
Thank you for listening.
Konark
See you next time.