In this episode of Interpreting India, Sanjay Gupta joins Konark Bhandari to shed an industry perspective at semiconductor supply chains and India’s potential in the space. Given their rising demand, what have governments across the world been doing to strengthen semiconductor production capability? Where does India fit in? What does the increase in semiconductor capabilities mean for the world?
In this episode of Interpreting India, Sanjay Gupta joins Konark Bhandari to shed an industry perspective at semiconductor supply chains and India’s potential in the space.
Today, semiconductors are used everywhere. 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—semiconductors are ubiquitous. However, in the last couple of years there has been a dearth of supply of semiconductors. The semiconductor shortage today can be attributed to supply chain disruptions and several geopolitical factors in the early days of COVID-19. Realizing their importance and potential, countries around the world, including India, have been investing in the semiconductor capabilities. In December 2021, the Indian government approved a Rs. 76,000 crore production-linked incentive scheme to boost semiconductor and display manufacturing.
Given their ubiquity, what have governments across the world been doing to strengthen production capability? Where does India fit in? What does the increase in semiconductor capabilities mean for the world?
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Episode Contributors:
Sanjay Gupta is the vice president and India country manager at NXP India. A seasoned professional with more than 25 years in the semiconductor industry, Sanjay is committed towards the development of the sector in India and has been vocal about the importance of government-industry-academia partnership in key industry forums. He leads NXP’s business in India while ensuring local compliance with both government and corporate programs and policies.
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. He is currently working on a research project on semiconductor supply chains.
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Transcript
Konark
Hello and welcome back to interpreting India.
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 am your host Konark Bhandari and this week we're discussing.
Konark
Semiconductors today. Semiconductors are used everywhere, whether it's the device on which you are streaming this episode, the driver assists or safety features of a car or aerospace and defence equipment, semiconductors are ubiquitous.
Konark
In the last couple of years there has been a dearth of supply of semiconductors. The semiconductor shortage today can be attributed to supply chain disruption in several geopolitical factors. In the early days of COVID-19.
Konark
Realizing the importance and potential of semiconductors countries around the world, including India, have been investing in the semiconductor capabilities in December.
Konark
2021 the Indian government approved a rupee 76,000 Colonel production linked incentive scheme to boost semiconductor and display manufacture.
Konark
In this episode of Interpreting India, we'll take a closer look at semiconductor supply chains and India's potential in the space.
Konark
What have governments across the world been doing to strengthen production capability?
Konark
Where does India fit in?
Konark
What does the increase in semiconductor capabilities mean for the world to help us navigate some of these questions we have with us today?
Konark
Sanjay Gupta.
Konark
Sanjay Gupta as the vice president and India country manager and XP, India a seasoned professional with more than 25 years in the semiconductor industry.
Konark
Sanjay is committed towards the development of the sector in India and has been vocal about the importance of government industry Academy of partnership in key industry forums in needs and XP business.
Konark
India while ensuring local compliance with both government and corporate programs and policies.
Konark
Sanjay, welcome to interpreting India delighted to have you with us.
Konark
Let us begin by understanding the key reasons for India to make a massive push for having a semiconductor industry.
Konark
As we all know, during COVID-19 there was a momentary disruption in supply chains.
Konark
The world over.
Konark
And you know, as we all know, by now automobile companies had to cancel their orders.
Konark
Chips were basically repurposed towards different consumer electronics applications. There were also US export control measures at this time which were instituted, which essentially completely prohibited sales to many companies blacklisted by the US Commerce Department.
Konark
So many companies began to essentially stockpile chips at this time, and they essentially ordered several years worth of semiconductors.
Konark
There were also some natural disasters which struck in various countries which affected chip manufacturing capabilities.
Konark
So Sanjay, as I said before, can you just help us to get a good lay of the land regarding the key reasons for India to make a massive push for having?
Konark
A semiconductor India.
Sanjay Gupta
Sure, thanks for the question, so I will answer the question in, you know one in a short term mindset and one in a.
Sanjay Gupta
Long term.
Sanjay Gupta
On the outside, I would say that even without this pandemic, having the semiconductors expertise both in design as well as in a.
Sanjay Gupta
Long term manufacturing.
Sanjay Gupta
Now with the whole ecosystem was very much in the.
Sanjay Gupta
Purview of Ministry of Electronics and Government of India for more than a decade, and the simple reason is we have to think it.
Sanjay Gupta
You know, as an economist but today.
Sanjay Gupta
Any economy which is having higher quality of output versus another economy or another country having the equivalent, you know level of economic output.
Sanjay Gupta
You know the the level of fiscal balance between the two countries is decided based on that quality.
Sanjay Gupta
If you recall the old bottle.
Sanjay Gupta
System where you know one cagey of a wheat, replacing with one cagey of say you know milk or any other commodity, that's how it started, and today, with all estimates, the kind.
Sanjay Gupta
Of import that India does every year, year on year. It has been a big drain on country's economy. And as we all know, the more the fiscal deficit, the more the value of Indian rupee get devalued and it has consequences on the country's inflation. And you know overall.
Sanjay Gupta
Economy going down, and that's where the government realizes it long back that the way we are consuming electronic products as in.
Sanjay Gupta
Starting with the largest mobile phone consumption market in India, starting with growing network infrastructure, the growing Internet access if we do nothing about electronic manufacturing and keep on importing.
Sanjay Gupta
You know there was a point where it was realized this whole import is going to overshoot to a point where it is more than even the oil imports, and we already know that you know every.
Sanjay Gupta
₹1.00 increase in two, you know, crude price for every $1.00 increase in crude price directly results into significant impact on India GDP and as the fiscal deficit.
Sanjay Gupta
So we did not want it as.
Sanjay Gupta
A country to.
Sanjay Gupta
Have a second source which becomes such a big liability on us for many, many.
Sanjay Gupta
Decades to come hence.
Sanjay Gupta
Government of India rightly decided that we have to do something.
Sanjay Gupta
About it
Sanjay Gupta
I think COVID only created you know what was not very obvious to obvious to everyone.
Sanjay Gupta
That not just in terms of countries economy in terms of the overall supply chain, complete dependence upon one or two countries for semiconductors manufacturing is not good in long run, hence it becomes an additional factor in my opinion, which further expedite the need for you know, self reliance.
Sanjay Gupta
And as the honorable Prime Minister says.
Sanjay Gupta
Never borrow to help the self capability to design semiconductor chips so that we are all ready for future one.
Sanjay Gupta
We need to do everything in the world so.
Sanjay Gupta
These are the primary two reason in.
Sanjay Gupta
A very simplistic way I.
Sanjay Gupta
Would want one state.
Konark
Hello Sanjay or you know brought up the question of there being a massive import bill and the Prime Minister is vision of an automobile pilot.
Konark
At this point I'll ask you a tangential question now, are there any lessons from consumer electronic industry where we have seen moderate progress in the make in India plan?
Konark
Would there be any lessons from that particular scope of the industry?
Konark
To apply to the semiconductor industry.
Sanjay Gupta
Well, uh, I think you are quite right when you make that comment that lessons learned from, you know the other industries which were actually old parallel life, you know, should see with respect to semiconductors.
Sanjay Gupta
And I would say based on whatever I'm seeing in terms of policies and procedures being laid out by Government of India, I think they have not just learned some lessons, they have actually trying to leapfrog a lot of other countries in terms of offerings that they are trying to you know lay out for.
Sanjay Gupta
3 conductors manufacturing just to give you some insights into why I am saying so.
Sanjay Gupta
I haven't seen a government policy.
Sanjay Gupta
Where you offer 50% of up to 50% subsidies, not just on the infrastructure to cost, but on the entire project cost and for your viewers, it's important to know that when we say project cost, it's more different from just the infrastructure cost because the project cost includes M2 and expenditure.
Sanjay Gupta
Including buildings, lands, water, electricity, even the manpower right?
Sanjay Gupta
Versus just saying that, OK, whatever.
Sanjay Gupta
Hardware capital investment that you do we are.
Sanjay Gupta
Going to offer that.
Sanjay Gupta
Subsidy, so in my mind.
Sanjay Gupta
Offering such a heavy subsidy, which is of course dependent upon which technology know that you go for. For example, if you go for advanced technology, node in 16 nanometer or below, I believe there is up to 50% subsidy on the project cost. If you go below 60 nanometer but above 28.
Sanjay Gupta
Or above 30 above 40 nanometer, then it's 40% subsidy and then below 40 nanometer. It's 30% subsidy.
Sanjay Gupta
But I think it's huge because any.
Sanjay Gupta
Company who would like to invest in India and they straight away get 3040 or 50% subsidies on the tablet cost for five to six years of overall duration.
Sanjay Gupta
I think it's amazing.
Sanjay Gupta
It has never been seen before in any other sector.
Sanjay Gupta
If you go back whichever sector you pick up, I think this is one of the first kind.
Sanjay Gupta
The Government of India.
Sanjay Gupta
Has laid out this policy.
Sanjay Gupta
And the kind.
Sanjay Gupta
Speed the kind of action, the kind of seriousness that I'm seeing in two different government departments.
Sanjay Gupta
You know the sense of urgency with which they are coming on and laying out one step after another, including setup of Indian Semiconductor mission, right?
Sanjay Gupta
So this is an independent body that they have decided to set up.
Sanjay Gupta
With independent leadership team and you know, direct decision making power for driving this whole sector forward says a lot about the government's intent, which again I don't see has been done in many of the other manufacturing sectors. So I'm very positive seeing all that which is.
Sanjay Gupta
And another thing I would like to mention that it is not just about semiconductors manufacturing, which is of course.
Sanjay Gupta
The last you know, dream of any.
Sanjay Gupta
Country to become self-reliant.
Sanjay Gupta
There are lot of ecosystem that goes along with the semiconductor chips.
Sanjay Gupta
Once you manufacture a chip you know it's it's a.
Sanjay Gupta
Raw chip, it's a silicon wafer, but.
Sanjay Gupta
To convert a raw silicon wafer into a usable chip, there is a the whole industry we call OSAT or a TMP.
Sanjay Gupta
You know which is nothing but automatic?
Sanjay Gupta
You know testing, packaging and the validation before a chip is any used to end customer.
Sanjay Gupta
These entire.
Sanjay Gupta
You know, supplementary setups are also part of this new semiconductor policy, and I believe again up to 30% of the overall project costs are being proposed as subsidy from the government.
Sanjay Gupta
Even if you want to set up these offset facilities in India and truly speaking with already design capabilities.
Sanjay Gupta
Plus manufacturing plus OSAT.
Sanjay Gupta
This will make a whole end to end ecosystem in the country.
Sanjay Gupta
Which I believe will kill another issue that was there for a long time, but even if you have a discrete solutions in lack of the overall end to end solution, we will always be bottlenecked because of our infrastructure and the supply chain channels.
Sanjay Gupta
So I think this is a very visionary move, but I'm seeing after a long long time and of course.
Sanjay Gupta
It's only half job done.
Sanjay Gupta
We have to see the implementation and you know the follow from there.
Sanjay Gupta
But so far it looks very promising.
Konark
I was just going to come to the Indian Government's recent plan announced last month regarding semiconductors ₹76,000 per scheme.
Konark
Approximately 10 billion U.S. dollars and we have addressed many of the critical components of that scheme. I wanted to just delve a little bit deeper into that scheme and talk about, you know the government incentives.
Konark
I mean clearly the plan you feel plan is attractive enough to turn investors, but what more can be done?
Konark
Is there anything more which the industry fields could be done in this plan to attract investment and you know also, what do you think about the proposal in the plan?
Konark
For example a.
Konark
Lot of countries in the past have usually focused on the high end nodes of chipmaking you know, as you mentioned, 16 nanometer.
Konark
Below, but the government is also sort of incentivized.
Konark
In this scheme, the production of chips even above 16 nanometers, they're giving subsidies for that as well.
Konark
So what is your overall estimation of the scheme, and do you think more can?
Konark
Be done to attract invest.
Sanjay Gupta
So the first thing is you know if you look into the consumer electronics.
Sanjay Gupta
If you look into the gadgets that are being used by masses, you know the reality is that the the latest advanced modes.
Sanjay Gupta
28 nanometer or lower which is 16 nanometer you know, and further bound, these are the nodes which definitely are the cutting edge. But the masses are not still using the products from them right at Max. You might.
Sanjay Gupta
Now iPhones, you know, being made from chips which are of these latest cutting edge nodes, but majority of the mobiles, for example, that we'll be using in India with the 1.3 billion population.
Sanjay Gupta
And even if.
Sanjay Gupta
You say everyone has one mobile and we.
Sanjay Gupta
Have the highest in wild penetration.
Sanjay Gupta
Country in the world.
Sanjay Gupta
The reality is that 80% of the mobile will not be falling into the advanced smartphones, right? That's the reality.
Sanjay Gupta
Still there are lot of feature phones that are being used over at the bottom of the pyramid.
Sanjay Gupta
Same way when you talk about.
Sanjay Gupta
A lot of gadgets used in home, whether you call it, you know TV or fridge or you know the simple sensors.
Sanjay Gupta
None of those are in the cutting edge technologies.
Sanjay Gupta
Not only that government also.
Sanjay Gupta
Trying to think from not just the the supply side of the problem, there is another problem, which is the demand side of the problem.
Sanjay Gupta
No one is going to benefit from a fab if there's a lot of.
Sanjay Gupta
Manufacturing of these chips, but there are no takers.
Sanjay Gupta
So how to create a sustainable demand?
Sanjay Gupta
That is another thing.
Sanjay Gupta
Now we might look into a tunnel vision and think what is happening today.
Sanjay Gupta
With the shortage of.
Sanjay Gupta
We will, but we all know that you know everything will come back to the mean reversal sooner or later.
Sanjay Gupta
Which means that sooner or later the demand is going to come back to normalcy.
Sanjay Gupta
Whether it takes one quarter or two quarters or a year hit.
Sanjay Gupta
Nobody has seen the consumed while, so we will only see it in future.
Sanjay Gupta
Lot of internal demand that will be generated within India from local consumption.
Sanjay Gupta
It could be from our defence sector.
Sanjay Gupta
It could be from local industries.
Sanjay Gupta
You know the small scale industries.
Sanjay Gupta
I can guarantee you that none of those entry level electronic requires the cutting edge.
Sanjay Gupta
50 nanometer so Long story short, since government is putting this entire.
Sanjay Gupta
You know positioning from 65 nanometer 4528 fourteen? I believe that it is much wider scheme applicable to the country dynamics and applicable for a long term sustainable demand.
Sanjay Gupta
So it's actually the right thing to do versus offering it only for the advanced route.
Sanjay Gupta
So that is to answer your you know.
Sanjay Gupta
Question number one, I believe now you have also asked what extra we can do to make sure that India becomes less any conductor superpower in dynasty com.
Sanjay Gupta
So my response would be that you know like there's a famous quote Rome was not built in one day, right?
Sanjay Gupta
So same way, no matter how much passionate we are, no matter how much.
Sanjay Gupta
Reality is that it will take its own sweet time.
Sanjay Gupta
It a plant cannot become a tree in day one, right?
Sanjay Gupta
Even if you want best in class sunlight and mature and new water, and if you are.
Sanjay Gupta
Having right commitment.
Sanjay Gupta
It will take its own sweet time.
Sanjay Gupta
But I will give you example of a bamboo tree.
Sanjay Gupta
You know for six years you water it, you know.
Sanjay Gupta
Measure it, nothing comes out and suddenly within next six weeks it grows by over 100 feet or so because you weren't taking care of that to make the roots or you know, found it. Well, I would say that if government continues to have the right intent.
Sanjay Gupta
Policy laid out is one thing, but implementing it, having the right leadership in place is another thing.
Sanjay Gupta
And if we execute onto this plan, well, I do not think with the kind of talent India has with the kind.
Sanjay Gupta
Of Operational excellence, India can create.
Sanjay Gupta
We have proven it in.
Sanjay Gupta
You know various different aspects.
Sanjay Gupta
Wherever this kind of focus.
Sanjay Gupta
Or put in your.
Sanjay Gupta
Examples you know the famous missile story of India, the circulate story of India?
Sanjay Gupta
You know the the UID hard story of India where we penetrated the billion.
Sanjay Gupta
People against anybody you know.
Sanjay Gupta
I would say buzz dreams it is.
Sanjay Gupta
It is a testimony to the fact that we can do anything but that is laid out in front of funds.
Sanjay Gupta
Provided there's a political will and there's the right execution.
Sanjay Gupta
I know this is a daunting task.
Sanjay Gupta
If it was easy, any country would have done it.
Sanjay Gupta
India would have done it long, not the reason it is difficult.
Sanjay Gupta
That's why we are at this point in time.
Sanjay Gupta
But I also believe that this time the mood is different.
Sanjay Gupta
This time we are on a cross junction which seems very different.
Sanjay Gupta
The country is looking forward to that.
Sanjay Gupta
The industry is looking forward to that.
Sanjay Gupta
Customers are looking forward that.
Sanjay Gupta
And I honestly believe even the world is looking forward to that after seeing what happened in COVID, they would like India, which is very stable or geography or stable.
Sanjay Gupta
Can't be right leadership, you know.
Sanjay Gupta
Good policies and ease of doing business is continuously on the upside in.
Sanjay Gupta
Last six years we.
Sanjay Gupta
Have I think jumped more than 70?
Sanjay Gupta
80 places as per.
Sanjay Gupta
World Bank so we are having all the right.
Sanjay Gupta
Guns which are firing for.
Sanjay Gupta
US and I do believe that to to answer.
Sanjay Gupta
Your last question.
Sanjay Gupta
If something can be done, I would say.
Sanjay Gupta
We need to have companies in India just like the bigger giants of which are ruling the semiconductors world.
Sanjay Gupta
Right now there is none we can manufacture, but again manufacturing without design without concept might look hollow in long run.
Sanjay Gupta
So my personal desire would be that government or vision.
Sanjay Gupta
Which I believe is very much there, should we?
Sanjay Gupta
We don't the whole side of the story.
Sanjay Gupta
So if it is a.
Sanjay Gupta
A circle, I would say the one side is when stretching the other side of.
Sanjay Gupta
The circle is.
Sanjay Gupta
Auroracoin is our design and we need to focus to create some of the Indian giants which can compete with the global giants with the same repetition that yes we can also as a country design ports.
Sanjay Gupta
And these products are best in class. These are very cutting edge disruptive products for the industry. Whether they go into 5G, North Korea or go into wireless market, you know the whole world is open to us, it is.
Sanjay Gupta
9 and that's where I will think that the starter program and the program it has launched.
Sanjay Gupta
With the equal fanfare and and the kind of celebrity status, the startup leaders are getting just like you know, the sport leaders get or overfilled shots get with that kind of of celebrity status.
Sanjay Gupta
Getting to innovators and you know the business process.
Sanjay Gupta
Innovators will really change anything.
Sanjay Gupta
And I think again, you know things are aligning well so I would love to see where companies startups are designing side of the story and then when they need to manufacture they have manufacturing capability within India.
Sanjay Gupta
Anti RECO system end to end is present, so that could be my desire and Dom it is already the third part of the scheme called Lie right designing incentives so government is already working on that.
Sanjay Gupta
So there is an initial proposal also where for some of the startups which are having majority stake as an Indian.
Sanjay Gupta
They will be getting about $2,000,000 of funding from the government as long as they can prove their concept and they can prove that yes, this money was worth it in terms of semantic solution.
Sanjay Gupta
So this is a very good first step. I will also say that it is not going to be sufficient because we cannot make a multi billion dollar semiconductor organization with two $2,000,000 but nevertheless.
Sanjay Gupta
Anything is more than zero, is voted right?
Sanjay Gupta
So this is a very good beginning and this will inspire more and more people to come.
Sanjay Gupta
Forward and, you know, use and leverage onto this funding and hopefully with all the avenues of investment.
Sanjay Gupta
Now we open in India as well.
Sanjay Gupta
With the right level of infrastructure, support, enablement, support funding.
Sanjay Gupta
There there will be good handholding will.
Sanjay Gupta
Be done from these companies.
Konark
And the point about you know the world looking towards India to be a manufacturer of chips is well taken, and it's an interesting segue into another point of techno nationalism.
Konark
Now you mentioned at the beginning of this podcast how well the Indian government was already seized of the matter to increase chip production even before the pandemic hit and essentially.
Konark
Now this is the issue of techno nationalism, which as the Carnegie scholar Michael Nelson had said, is essentially privileging security concerns over commercial benefits.
Konark
The every country sort of seeks to become super salient in manufacturing of chips.
Konark
So the question at this stage is, you know, various countries have come up with plans to manufacture chips to be self sufficient.
Konark
So the issue is, could overproduction happen?
Konark
Could this lead to a garden supply and then eventually lead to a subsequent falling prices Sanjay.
Sanjay Gupta
The uh.
Sanjay Gupta
I would say that at the end of the day, as I said earlier, everything comes back to the mean, right?
Sanjay Gupta
So something is Ultra low.
Sanjay Gupta
It will come back to mean by rising up something going extremely, you know super duper aggressively will come back with a lower consumption or lower.
Sanjay Gupta
Usage can't come back to me, but just like you know, the equity curve behaves in any market.
Sanjay Gupta
Everything comes back to me so.
Sanjay Gupta
Well, if the whole world starts doing it and doing it over and beyond the regular demand, what you are saying might be, you know.
Sanjay Gupta
True, but I would presume that if you look into the current.
Sanjay Gupta
You know status.
Sanjay Gupta
With multiple results that have come out, semiconductor manufacturing demand is growing at the rate.
Sanjay Gupta
17 to 18% versus the way manufacturing capability and capacity building is happening is happening at 7 to 8%, so at least at this point in time, the growth is much much surpassing the availability or the infrastructure the way it is catching up. So growth.
Sanjay Gupta
Is ahead of the curve and.
Sanjay Gupta
I think again if you look around all the application areas from automotive to industrial, you know everywhere.
Sanjay Gupta
On average, double digit growth of semiconductor electronics that is growing just to make it real, you know, take a automotive sector which we can all imagine right because we all drive those cars.
Sanjay Gupta
A typical car 10 years back, versus a typical car today you will see a.
Sanjay Gupta
Wall difference in the way.
Sanjay Gupta
Electronic sing is being used in club car.
Sanjay Gupta
Today's car we all know.
Sanjay Gupta
We have a desire that it should behave like our living room.
Sanjay Gupta
It should have the you know, the latest touch based capabilities with Bluetooth.
Sanjay Gupta
With you know all your connectivity.
Sanjay Gupta
That you believe your home gadget will provide your car should provide. It needs to have a GPS capability. It needs to have latest, you know, touch panels and audio video capability beyond entertainment. It needs to be having the power steering's and power windows and you know.
Sanjay Gupta
Now the automatic lighting automatic wipers.
Sanjay Gupta
And going ahead, the Super advanced cards which may not be there that much in India with a lot of ADAS capability where the blind spot detection capability is the pedestrian detection capability.
Sanjay Gupta
To avoid accident.
Sanjay Gupta
You know some of those cards are already in India but most.
Sanjay Gupta
So these cards are pretty common in Europe and US, and now even going beyond that we are trying to talk about the driverless cars, which is something that we all, as automotive companies are in.
Sanjay Gupta
So the point I'm making is from probably five to six small semiconductor microcontrollers in a car. Now we are moving towards 250 to 300 to 500 chips in a car and not only number of chips. The integration in these chips are also increasing exponentially, just like more slow. So from probably.
Sanjay Gupta
10,000 transistors, or you know, 100,000 transistors. We are now going into millions of times turn into these chips. So not only number is increasing, the density is increasing.
Sanjay Gupta
If we continue to go that way, it is both obvious that the semiconductor content in every sector is increasing.
Sanjay Gupta
I just talked about automotive within automotive.
Sanjay Gupta
We have electric cars.
Sanjay Gupta
They have, you know their own requirements for the advanced charging capabilities, the regenerative breaking capabilities we will have the battery management.
Sanjay Gupta
System which need to be super advanced.
Sanjay Gupta
Now we're talking about connected calls where car to connect to the car to cloud connectivity. Everything requires 700 plus, right?
Sanjay Gupta
Now this was automotive.
Sanjay Gupta
You go to industrial same thing you are looking for industrial remotes where they can automatically detect which of your shelves in a that's a big warehouse or empty and they will have the automatic loading and unloading capabilities.
Sanjay Gupta
And even knowing that which shelf are empty, you don't need a manual supervision.
Sanjay Gupta
You will have sensors below each of the shelves which are automatically be talking to your central database which will be automatically talking to your external warehouse or even a customer warehouse and then demand will be requested automatic.
Sanjay Gupta
This knowledge will be governed by advanced electronics and of course coupled with a smart machine learning and, you know, artificial intelligence loaded chips which.
Sanjay Gupta
Is the future right?
Sanjay Gupta
So any sector you go health sector you go, you have smart watches, your smart bands.
Sanjay Gupta
Each one of these have the capability to measure your sleep pattern.
Sanjay Gupta
Your blood pressure, your you know how.
Sanjay Gupta
Rates and some of the very advanced phones are actually trying to even.
Sanjay Gupta
Decode your ECG, which could be a.
Sanjay Gupta
Medical grade right?
Sanjay Gupta
We are moving into era where everything around us at.
Sanjay Gupta
House, you know?
Sanjay Gupta
Your refrigerator and washing machines are loaded with chips and they can gauge what time of the day electricity is going to be cheaper.
Sanjay Gupta
What time of the day it is going to be stable when the loading is less and so many other factors, refrigerator can automatically order your food from the warehouses in US now, right so?
Sanjay Gupta
Long story short, everything that we touch is exponentially.
Sanjay Gupta
Growing in our.
Sanjay Gupta
Electronic content, which indirectly means that the demand for semiconductor manufacturing is going to increase, which automatically means that we.
Sanjay Gupta
Need more from fabs.
Sanjay Gupta
Other than where they exist, right?
Sanjay Gupta
Now, and I truly believe that in the pie is going to be too big to be.
Sanjay Gupta
To to be, you know, overloading, at least for next one to two decades.
Sanjay Gupta
That is my hope, vision, desire as well, but it is backed by facts, right?
Sanjay Gupta
So with the high double digit capital growth of semiconductors.
Sanjay Gupta
I think it is a matter of time, but any country which will have a file will be loaded with the mark.
Konark
To enable this you know futuristic vision which you painted Sanjay.
Konark
I guess it would be very critical to have an enabling ecosystem as well at the same time, and you mentioned the government policy the dealer policy as well.
Konark
There's also the talk about the Indian semiconductor addition. Now the issue at this stage is, you know it's still not clear as to what the details are regarding the ISM.
Konark
It's a nodal agency within the Digital India Corporation.
Konark
But how would you prefer from a public administration standpoint?
Konark
How would you prefer it to work?
Konark
Should it be?
Konark
A interdepartmental committee, should it be something temporizing of experts which have?
Konark
You know basically.
Konark
Binding, say, on the issues as to how you know the the entire thing is.
Konark
How do you think it should?
Sanjay Gupta
Go ahead, I would say that in a very simplistic.
Sanjay Gupta
Way for your.
Sanjay Gupta
Views you know, just like a private organization works with a very clear mandate, very clear targets, and very clear accountability.
Sanjay Gupta
I think these things should go hand in hand even for our.
Sanjay Gupta
ASM to become such.
Sanjay Gupta
So my my dream would be that it is led by able leaders and a great leadership team who know the subject matter of Mount Saint Nicholas number 1 #2. They should be provided with the you know, as much as empowerment and authority to their decisions as it is being done.
Sanjay Gupta
By any multinational organization.
Sanjay Gupta
CU so so that they can execute to that vision without any interruption without any.
Sanjay Gupta
And of course, like even a CEO is accountable to the board, so these people should also be accountable to the government and to the stakeholders, because this is not a small matter, right?
Sanjay Gupta
We're talking about billions of dollars at stake and you know multi multi billions of.
Sanjay Gupta
Potential of these fabs and most importantly, aspirations of not just millions of Indian but also the rest of the world.
Sanjay Gupta
Who is going to look at India that if India can become big in design and software and it can they repeat it in semiconductor function?
Sanjay Gupta
So it's a matter of credibility.
Sanjay Gupta
It's a.
Sanjay Gupta
Matter of pride.
Sanjay Gupta
And I would think that.
Sanjay Gupta
The leadership team who drives that should be good enough to meet all these expectations.
Sanjay Gupta
Certainly they need to be given full involvement.
Sanjay Gupta
As I said for the decision making and I think rest is going to be going to a very natural outcome that I would assume.
Sanjay Gupta
I will probably equate it to the level of, say, the metro projects that was started in India long back, right at that point in time when India had no metro infrastructure.
Sanjay Gupta
I think you know.
Sanjay Gupta
Great legendary, Mr Sheeran were appointed right so he's of a caliber where he demanded or empowerment and then he delivered something which right now is he has become more model to many other countries, at least in many states.
Sanjay Gupta
Same way I would say the way the the entire Aadhaar.
Sanjay Gupta
And UID process was laid out with a clear leadership and support from the government.
Sanjay Gupta
And another thing I would like to mention that since this is one of our national cause.
Sanjay Gupta
Much bigger than any political cost, so this kind of institutions should be completely separate from the political changes that happen in the country.
Sanjay Gupta
So from that perspective, just like Election Commission, these should not be changed just by the government changes it.
Sanjay Gupta
Another very important.
Sanjay Gupta
A thing for the stability of this mission.
Sanjay Gupta
For the country.
Sanjay Gupta
And I think these three things you know, complete empowerment and transparency, right leadership, and the right structure will will really make us India on the.
Sanjay Gupta
Right right path.
Konark
Posted every bit deeper into your, you mentioned three things about there being a strong leader authority to execute the projects and also being accountable.
Konark
I want to just go a bit deeper into the first point of having a strong leader.
Konark
Now you mentioned the other project, you know in that Mr.
Konark
Miller Kenny was given essentially the lack of a cabinet minister and so would it.
Konark
Would it be possibly worth?
Konark
Exploring the option of having the head of the Indian semiconductor mission to be somebody who has the cabinet rank.
Konark
You know somebody who's like a tech jar who can execute projects at scale?
Konark
Would that be worth exploring?
Sanjay Gupta
Why not again?
Sanjay Gupta
It is for the government to pick up the right right kind of visibility and impact so that you know this person delivers and is having the impact onto the both national and international scale.
Sanjay Gupta
But yeah, there could be many ways to to get this in place, so.
Sanjay Gupta
What you said could also be one of the possibilities.
Konark
Sure, now the last question is essentially, well, we've been in this industry for so long and I'm sure you've heard about the plans and the EU and the USDA also sort of boost their production capabilities.
Konark
The US has introduced this bill, which is not a law as of now. It's called the Chips Act creating helpful incentives to produce American.
Konark
Uh, do you think there are?
Konark
Any takeaways which India has?
Konark
To you know, essentially learn from from the other countries.
Konark
I know we have.
Konark
Our own uh scheme of.
Konark
Promoting semiconductor production in the country now.
Konark
But are there any?
Konark
Best practices which you can possibly look to from overseas which India can incorporate in its own.
Sanjay Gupta
Plan, yeah so.
Sanjay Gupta
My response is, you know, while we look into every possible best practices or the processes being run across the world, you know we have many examples from Asia from Europe from Japan.
Sanjay Gupta
But I'm firm believer that you know some of the things that are specific to India.
Sanjay Gupta
We should be customizing them as per our needs, sometimes completely.
Sanjay Gupta
Copying it from one country to another may not work because culture is so important into any strategy.
Sanjay Gupta
Again, there's a.
Sanjay Gupta
Famous code, but a culture you know.
Sanjay Gupta
It's so important that it.
Sanjay Gupta
It can eat strategy.
Sanjay Gupta
Not great for.
Sanjay Gupta
The US right so so that's a code so so.
Sanjay Gupta
I, I would say that that culturally what suits you India and you know Indian democracy.
Sanjay Gupta
Democracy-based operations are very different from China where you know you know that whatever you want to do you can do with them over the strings of any kind or even if there is, you know you can get away without.
Sanjay Gupta
So I think India needs to find a way where.
Sanjay Gupta
Whatever we decide is sustainable for the long run and it is.
Sanjay Gupta
Exactly suiting to.
Sanjay Gupta
Indian demands now.
Sanjay Gupta
I personally believe that India is so huge that we can we can create our own internal demand.
Sanjay Gupta
We don't need to.
Sanjay Gupta
And as long as we can maintain that.
Sanjay Gupta
But very good policy make making already there that internal industries will be given preference for the internal sourcing.
Sanjay Gupta
It could be government.
Sanjay Gupta
It could also be applied to a lot of Indian companies which are taking benefit from government schemes right and slowly, slowly once these baby industries are standing on.
Sanjay Gupta
Their own feet.
Sanjay Gupta
You know, gradually they will not need any subsidies or any you know external support.
Sanjay Gupta
Because I also believe that competitiveness at the end of.
Sanjay Gupta
The day is a long-term sustainable thing for which every Indian company should stand for.
Sanjay Gupta
So yes, while we look into every country for best practices, I think what makes you know good cut for India?
Sanjay Gupta
That is something that we should be doing and creating internal demand is the first thing that we should do for all of our internal startups.
Sanjay Gupta
Pick up people's interest.
Konark
Well, Sanjay, I wish this discussion could go on longer, but I think we're nearing the end of our podcast now, so thank you so much for joining us today.
Konark
Thank you to you and your entire team for setting this up or very glad to have you join us and hopefully we can have you on board for any future discussions on this topic as well.
Sanjay Gupta
Thank you very much, Konark.
Sanjay Gupta
It was a cool pleasure at my end.
Sanjay Gupta
To join this podcast, a very important topic for India and I'm sure if you put Overacts together, Sky is the limit for us and in the next couple of decades we will be known, you know, as an authority in this field.
Sanjay Gupta
So thank you so much for bringing this like PowerPoint.
Konark
We'll be back in two weeks with a new episode.
Konark
Would make sure you don't miss it.
Konark
Be sure to subscribe on Apple Podcasts or if I teacher or wherever you get your podcasts, you learn more about our research in team.
Konark
You can visit us at carnegieindia.org. You can also find us on social media on Twitter Facebook.
Konark
And Instagram, thank you for listening for you next time.