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Before the End of This Decade, India Will Be the 3rd Largest Consumer of Electronics Goods and 5th Largest Producer of Electronics Systems in The World

Before the end of this decade, India will be the 3rd largest consumer of electronics goods and 5th largest producer of electronics systems in the world. As a country, we have enabled the global OEMs and ODM’s two distinct advantages. In the first step, we have given our ESDM market to global majors which itself is the first incentive. By giving them PLI to manufacture their products in India we have given a second incentive enlightens K Krishna Moorthy - CEO & President, IESA while in an exclusive interview with Niloy from BISinfotech. As the veteran is also on-fleek across the dossiers of ESDM sector and the evolution of indigenous Startup ecosystem he leaves no pages unturned in the edited excerpts below.

QTo start, K Krishna Moorthy you’ve been around in the industry, leading many facets across your career. Hence kindly tell our readers about your professional journey and the vital changes you witnessed in the ESDM sector in these four (4) decades.

Let me start by saying that each of the four decades was new learnings and new challenges. But if there is one technology that touched most human lives in the last 4 decades it is electronics and I am fortunate to have seen that happen during my active professional life. While the early part of my professional life was in the Military communication R&D in BEL where I was involved in developing tactical High frequency and very highfrequency communication systems for the defense and started as an individual contributor. By the middle of that 1980-90 decade, we saw the emergence of personal computers and powerful computer work stations and also the arrival of CAD/CAE SW products which enabled designers of electronics systems and also CAM SW tools which helped mechanical engineers to design and analyze their product design for robustness and reliability. The design process went

K Krishna Moorthy

through a paradigm shift during that period. Around the same time, the early to mid-’80s saw the arrival and maturity of HW description languages – VHDL and Verilog and very good compilers which made digital chip design flow transform. Around the same time the global Chip leader, Texas Instruments set up their design center in Bangalore and started developing some custom EDA SW products first. And STPI was setting up the Satcom links to enable these MNC companies’ high BW data communication infrastructures. The arrival of these design tools and powerful workstation and HW description languages made the chip designers think of packing more circuits in a sq mm of silicon and the concept of ASIC was getting born worldwide. It was in 1986, India designed its first ASIC and I am fortunate to have been piloting that project from the BEL R&D. We also saw the misfortune of the only CMOS Fab in India at SCL Chandigarh being destroyed in a fire in 1989. I must not forget here people like Mr N Vittal, the DOT secretary who at that time played a pivotal role in getting many initiatives giving the impetus required for the electronics and IT sector which later defined the road map for many new policies by the Government of India. The tax holidays for STPI units for Cap Ex etc. was a big game changer for the MNC’s to set up India design centers and leverage the engineering talent The 1990’s decade was when semiconductor design started in a big way in India with many global majors coming to India and starting their India design centers. By the mid-nineties, there were many of the big semiconductor OEMs in India with their IDC’s. Most of them started by developing embedded SW but also expanded to the less complex end of the design steps like verification etc. in chip design. But it was only a matter of time for the chip designers in India to prove their mettle to own full products from architecture onwards. I made the career change to the MNC, National Semiconductor Corpn. (NSC) in 2000 and within two years’ time we taped out the first processor embedded full-chip SoC from India and thereafter some baseband processor SoC’s for marquee customers were assigned to the team in India by NSC management. A lot was happening in the Indian Electronics and Semiconductor Industry. Chip Majors were starting big design centers in NCR and Bangalore and some fledgling starts ups were upping the ante in places like Hyderabad and Pune. The eco system was beginning to develop.

The economic meltdown in 2008-09 was a big dampener and what followed in the early to mid-2010’s decade was one of consolidation and M&A’s. But this also brought the Indian entrepreneurs out and many Indian startups got under way. Some of them who developed high-end IP’s even made successful exits like Cosmic Circuits. The IP value is being understood by the industry at large and by the Indian design entities particularly. It was in late 2011, I decided to join one of the world leaders in IP development namely Rambus Inc. The coming of age of the entire electronics and semiconductor ecosystem was seen in the late 2010-20 decade with many white-label mfg. entities starting to make in India for the world. The recipe is all written and the ingredients are in place set and the next decade of 2021-30 will see the ESDM getting accelerated in a big way. The skills needed for us to sustain this momentum are becoming a challenge and India has to focus on this quickly, else the growth will get stunted for want of talent with the right skills.

QAccording to you, your take on the future of the ESDM industry in the country?

The future of the ESDM industry is very bright. We selected the theme of the IESA Vision Summit this year as “India’s accelerated ESDM growth – the defining decade” because of this. We at IESA believe that this is now or never - the defining decade for the ESDM Industry just as 2000 to 2010 was the defining decade for the SW industry in India. It takes some time for any industry to reach a level of maturity in a country and to develop the supporting ecosystem, skills and infrastructure and they are coming up now in India for the ESDM industry across many states. The design startups are beginning to succeed in the System and Semi space. The MSME’s and EMCs are seeing value in manufacturing, the bigger Indian white label manufacturers are reposing faith in this industry and global system mfg. houses are expanding capacity in India. I expect the ESDM industry to contribute 8-10% of the country’s GDP by end of this decade. That is also the benchmark for many developed countries.

QFirst congratulations to IESA on completing the 16th edition of the IESA VISION summit with such new enthusiasm. In this edition, the word Startup and MSME seemed to be a vital topic. You, yourself have mentored many start-ups in the IoT products and semiconductor solutions space, according to you, what it needs for the startups to gain the interest of Venture Capitalist (VC) and also term profitability in a longer-term of their respective biz.

Thank you! Yes, IESA Vision Summit (VS) was a great success. We had about 40 sessions and 100+ speakers, both a record for IESA Vision summits since its inception in 2005. Being a virtual summit, we also adjusted the time to suit the international speakers and that helped us get top ranking global speakers as well as Policymakers from India to speak at the VS this year which included Industry veterans like Mr John Chambers and Dr Ajay Choudhry and the teenage celebrity speaker Ms Ria Cheruvu and Smt. Nirmala Sitaraman, our Hon’ble Finance minister, Mr Som Prakash, MoS Industry and commerce, Dr Aswath Narayan, Minister for IT&BT Govt of Karnataka and the MeitY Secretary as well as IT secretaries from Karnataka, Telangana, Odisha and AP also speaking at Summit. In the Vision Summit this year, we had focused on 4 categories of the ESDM industry - Fabless Semiconductor companies, System Start-Ups, MSME’s and Electronics & Semi Manufacturing. And these are the four categories that we will follow throughout the year. I personally believe that the StartUps in Electronics & Semiconductor, as well as MSMEs, will define the future of the ESDM industry in India. For example, the medical diagnosis and delivery of medicare will become more and more remotely administered through IoT enabled devices. For a rural economy-based country like India, this will give huge opportunities for its entrepreneurs. India will need EV and alternate energy solutions in abundance by the end of this decade. As far as VC’s are considered, they will come

once they see the megatrend emerging in the next couple of years. Unlike the SW industry, to which the entire mindset and thought process is tuned to in India, the Electronics and Semiconductor products and solutions take much longer to reach monetization levels. The VC’s normally have some proven equations to invest and the ESDM industry is yet to solve those equations to give the right inputs to VC’s but that is a short time away.

QPreviously associated with Rambus India and National Semiconductor India Design Center, and also held key positions in R&D at Bharat Electronics Ltd. How different from your previous stint is being on the leadership chair of IESA?

It is different in the sense that in these companies I learned how to execute a program that converts technology to business meaning how to assimilate new technology, apply them and create new products and solutions and do it myself or with a team. In IESA, as an industry body, I am connected to a lot of such companies and though I do not get involved in program executions like before. It also gives me a perfect view of the ecosystem in India and its strengths and opportunities. The Indian ESDM startup community will show its mettle very soon announcing products, IP’s and Solutions made in India for India and the world. My job is to enable and accelerate that process and act as a go-between the entrepreneurs and the policymakers to make the ride smooth for them.

QWhat are the key take-away from this year’s Vision Summit?

There are many but the most important one is the keen interest the international Semiconductor and Electronics Businesses has in India. They seem to be more upbeat about it than we are. Post-Covid when the GDP is projected to grow at 8.5-9%, while the best elsewhere in the world is about 5% or around, there is huge optimism about India and its electronics growth. So, our theme of “India’s Accelerated ESDM growth - the defining decade” resonated well through the deliberations of the Vision Summit. The address by the Honourable Finance Minister of India stated this in no uncertain terms and called upon the industry to plan for the future not in short term but in longer terms of 10-15 years and reduce the dependency on one country for all our electronics needs. Strategically. The role of the ESDM industry in India and its potential to become a priority sector in the next few years was stated by many global thought leaders. IESA also brought to the forefront some of the successful initiatives, in the recent past such as Electropruner park in Delhi and Bhubaneswar, and Hubli, all focused on innovative system-level products from Startups as well as SFAL in Bangalore which is catering to the development of Fabless Semiconductor design startups. This has kindled a lot of interest in the start-up segment. The speeches by Hon’ble MoS, Industry and Commerce Govt of India and by the Hon’ble Minister for IT &BT Govt of Karnataka also brought to fore the laser focus the governments are giving to ESDM through their programs.

QAlso if you can enlighten us about IESA’S key contributions to the industry?

IESA has contributed to the ESDM industry in many ways. First and foremost is to bring the industry together on a single platform as an Industry body that emerged to be the ‘ESDM leadership and knowledge partner for India’ in a short time span. IESA partnered with most of the state governments to help formulate the state level Electronics & Semiconductor policies. IESA is the undisputed knowledge partner today in India when it comes to ESDM Industry. IESA also worked with MeitY and STPI in getting the EMCs off the ground and also common facilities for ESDM Startups in many parts of India. Now we are embarking on a prestigious skill development program along with premier institutions in India to ensure that the well trained and rightly skilled talent supply does not run out as we drive ESDM growth. IESA has now opened chapters in NCR, Hyderabad and Western India. We will soon launch the Tamil Nadu chapter and a USA Chapter in early 2022. IESA is working with the many policymaking entities to expand the Electropruner parks in many more states and also start semiconductor design center infra with the required shared capacity created centrally and leveraged from across the country. We expect the policy enabling this to come out very soon. IESA is preparing two important documents which should provide the right insight to the policymakers as well as investors associated with this industry- the 2021 ESDM report and the Supply Chain Development report. The second one on the supply chain will identify the opportunities India will soon have to become a supplier to semiconductor manufacturing worldwide for the metals, minerals and chemicals which they use. They are abundant in India and need a certain level of processing to reach the required quality levels needed for this.

QGiven a few set policies now by the Govt. do you think silicon in India is no anymore a distant dream?

Certainly, I think it is not a distant dream. The seriousness with which the government is following up Silicon mfg. enablement, it is not a distant dream. The expression of interest (EoI) process has been completed and I would expect some new pathbreaking policies to come out very soon which imbibes the learnings from the EoI submissions. And silicon in India is not just silicon wafer fab, it covers Assembly Test, Marking and Packaging (ATMP) and also Compound fabs like Si Ge, GaN etc. for mfg. a special class of devices. These require much lower investments and hence can be started sooner and help build the ecosystem before the full-fledged Silicon fab gets off the ground. In fact, the government in the meantime can even consider refurbishing and upgrading the SCL fab in Chandigarh with minimum investments and start offering it commercially to Indian startups to design and test new chips. This will help them to know how to build world-class products at low costs. The opportunity this can create for our startups and fabless design houses to achieve maturity is enormous. The government can also consider a Govt to Govt. approach to bring fab technology to India soon.

QLastly, how do you foresee India becoming a global hub for Electronics specifically in propelling Semi Biz for the global economy?

Before the end of this decade, India will be the 3rd largest consumer of electronics goods and 5th largest producer of

electronics systems in the world. As a country, we have enabled the global OEMs and ODM’s two distinct advantages. In the first step, we have given our ESDM market to global majors which itself is the first incentive. By giving them PLI to manufacture their products in India we have given a second incentive. And with an economy that is expected to grow between 8-12% YoY and a young population that is tech-savvy, the inputs needed for the growth of electronics in India is all in place now. Government can now steer the policies to compel the global majors to manufacture the products and Silicon in India to make good use of these incentives and also develop the cause of ESDM in India. The Semi biz size is going from $25Bn (direct import and assembled modules) in 2020-21 to about $70Bn-75Bn in the next 5 years. And almost all global Semi majors are the direct beneficiaries of this market growth and they are all excited about it. The recent additional investments most of them are making to leverage the talent from India for furthering their design needs is proof of that. So, if you consider the total Semi Biz as Silicon Design, Silicon mfg. and ATMP, we have ticked the design box and are yet to tick the other two boxes. There can be compelling policy initiatives from the policymakers in India to make the other two happen soon. It can be a soft push policy or even a mandated policy through a consortium of global companies coming together to make that happen with Indian majors also joining hands.

QComponent inventory has become crucial with the market changing dynamically especially post-pandemic. Hence for Indian design centres how you do think they can successfully compete in these challenging times?

Indian design centers are not competing in the recent inventory management issue per se. But the Indian design centers are now occupying the center stage in defining and designing new products that can cater to emerging needs of India and the world at large post pandemic. One example is the ability and agility of Indian companies to develop a cost-effective ventilator and produce about 30,000 ventilators in a short time. The entire mfg. supply chain was tested in this national cause and Indian design centers and mfg. capability came winners. Another example is the ability of our top academic institutions coming together to up process the critical chemical used in Oxygen concentrators called Zeolite from Agricultural grade to medical grade in the shortest possible time. These were multi-disciplinary approaches that again tested our systems & processes and India came winners. So, I am optimistic that Indian design centers, mostly the startups which are maturing rapidly will be able to create newer solutions tailored for the India needs like in EV, Non-Fossil energy etc. and we will also develop the silicon needed for this. We will see all this happen in the next 4-5 years. After Oil, India today imports more electronics than anything else. Even gold has dropped to No 3 position recently. This level of import is not sustainable long term and I am very confident that the Indian ESDM industry will come of age to reverse this trend. India today exports more cars than it imports and it also adds most of the value in India itself except for the latest engine technology. In a few years our ESDM design and manufacturing centers will achieve similar results in Electronics.