Intel India MD Santhosh Viswanathan on the challenges of setting up a semiconductor fab in the country

Santhosh Viswanathan, VP & MD, Intel India

Intel India MD Santhosh Viswanathan laid out challenges India must tackle to attract semiconductor fabrication (fab) players, even as the global chipmaker has ruled out setting up a fab unit in the country.

Citing the example of Intel and its peers, who work on more advanced semiconductor nodes of 7 nanometers (nm) and below, he said it’s a lot more complex consideration for the company as manufacturing these advanced nodes will be highly capital intensive. This will require a proper supply and demand ecosystem, multi-million-dollar equipment, skilled labour to run the fabs and access to surplus water, land, electricity and the right set of regulations.

Speaking at a media roundtable on February 9, Viswanathan said, “If you look at a leading edge fab, it is highly capital intensive, it takes about $10-20 billion to go build one. It's a very complex ecosystem. One will need to figure out materials, suppliers, location, and not just labour but the entire ecosystem around it.”

The Union government is investing $10 billion over the next decade to help set up semiconductor manufacturing industry in the country through a production-linked incentive (PLI) scheme. Several companies, including Vedanta and Taiwan’s Foxconn, have applied to set up fabs in the country but most of them are of higher nodes of 28 nm and above, which will be used in automotive, telecom, power and trains.

Viswanathan added that setting up fabs or manufacturing plants for advanced nodes, companies will require significant water, land and electricity access in the tune of 350 MW of power every day. Moreover, there will be also be the requirement of proper regulatory environment, right processes to run waste management and more capital and financing assets from the government.

“Other things will be proximity to clients, proper supply chain, target markets, shipping rates and geopolitical stability. I'm just giving you a list, but there’s a huge amount of factors. It's not whether India will become a semiconductor hub, it definitely will. But it's just that we got to go address all of these factors. Once we start building the foundation for these, it will definitely happen,” he said.

Earlier, in an interview with Moneycontrol, former general manager for the Asia Pacific and Japan (APJ) Steve Long said that Intel had no plans to set up semiconductor manufacturing in India at the moment, but plans are evolving.

“India is becoming an alternative for a globally diversified resilient supply chain, not only in the semiconductor industry but in any industry. I think it's never too late for that,” he had said.

AI stands for ‘Amazing India’

Intel is currently more focused on partnering with homegrown Electronics Manufacturing Services (EMS) companies and Original Design Manufacturers (ODMs) to manufacture laptops in India. It had recently partnered with eight such manufacturers.

Last week, the company announced a slew of ‘Made in India’ products at the Intel India Tech Ecosystem Summit. Some of the highlights from the summit were a server created by Mega Networks that uses Intel's Xeon Scalable processors, and C-DAC's high-performance compute server called Rudra.

The event showcased diverse portfolios, including banking on wheels, thin clients, all-in-one clients, multi-function kiosks, and more using Intel’s technology.

In December, Intel launched AI PCs, which according to the company, will be systems with a CPU, a GPU and an NPU, each having specific AI acceleration capabilities. An NPU, or neural processing unit, is a specialized accelerator that handles artificial intelligence (AI) and machine learning (ML) tasks in the PC itself, instead of sending data to be processed in the cloud. These PCs will have personalised large language model (LLM) capabilities.

The AI PCs are already being rolled out in India across laptop brands.

Speaking of Intel’s India opportunity, Viswanathan said, “I am very bullish on India. AI is not just artificial intelligence, it is also amazing India. Because in my opinion, India has the right foundation. No other country has digital infrastructure at scale that we have. India stack is a game changer. Identity is established with biometrics and privacy, which means I can run large AI models at scale.”

He added that India has 20 percent of the world's data and these datasets can be used for training. India’s mindset to not jump onto trends and focus on cost efficiency helps.

“We have the best talent, with 16 percent of the world's AI talent coming from the country. All that puts us in a position to ensure that AI is a competitive advantage and we cannot lead the world if we don’t follow this path,” he said.

Over its three decades of presence in the country, Intel has invested nearly $9 billion. It has a team of over 13,000 engineers in the country.