'We At NXP Are Geared Towards High Growth': Sanjay Gupta
A seasoned professional with more than 25 years in the semiconductor industry, Sanjay is committed towards the development of the sector in India. Globally, NXP employs around 29,000 people in over 30 countries. Sanjay Gupta (India Head), Vice President, and India Managing Director, NXP India, part of NXP Semiconductors N.V. a Dutch semiconductor designer and manufacturer with headquarters in Eindhoven, Netherlands, talks to ASHISH SINHA about the growth and potential of semiconductor in India.
Excerpts:
What is the role of NXP India in making India the leading manufacturer of the semiconductor industry?
As one of the world leaders in securing connectivity solutions for embedded applications, NXP is driving innovation in the automotive, semiconductor, industrial & IoT, mobile, and communication infrastructure markets thus enabling secure connections for a smarter world. NXP India is now one of the world's largest Design Centres, and our team in India has created and incubated a wide range of hardware and software solutions for our worldwide clients in industries such as automotive (connected cars), digital payments (NFC enabled), 5G (RF solutions), and more. These solutions are used for built-in security in everything from microcontrollers to processors, secure elements, software, and a range of contactless services using NFC technologies like contactless cards for metro and toll gates and contactless credit cards.
We will continue to give impetus and support the government’s initiatives – like Make in India, Digital India, and Start-up India by helping to build a robust ecosystem of start-ups working in the semiconductor and IP design space across the country. We are also directing our efforts in the direction of helping India’s vision of becoming a global semiconductor hub and increasing our country’s electronics manufacturing to $400 billion by the year 2025.
Why are the scheme announcements garnering investors’ attention?
As part of the global reset post-pandemic, the Government of India has planned for schemes that will attract investors from across the globe, especially those planning to move out of certain domains from other countries to keep their value chain intact without having to depend on one source. The government has come out with many schemes for semiconductors along with a 20-year roadmap and a newly proposed India Semiconductor Mission (ISM) that will drive long-term strategies for the sustainable development of the chips in the right direction. The Government has allocated a budget over of Rs 76,000 crore for this comprehensive program under the Production-Linked Incentive Scheme and the Design related DLI Scheme.
India has over $75 billion worth of electronics manufacturing and due to the surge in demand, the market is ready to absorb this production in relation to chips for automobiles or display for TV. To enable India as a global hub for electronics manufacturing and design, the government is also focusing on training 85,000 semiconductor engineers and over sixty institutes, best of the IITs, NITs, engineering colleges to help them in becoming entrepreneurs.
How PLI and DLI schemes will help in fulfilling PM Modi’s vision of AatmaNirbhar Bharat?
The semiconductor industry is going to play a pivotal role in the growth and development strategy of the country. Semiconductors are used in almost every electronic device including transistors and integrated circuits, which in turn run consumer electronics such as smartphones, modern cars, TV, computers, etc. More than 90 per cent of global companies have established their R&D and design centres in India but never established their fabrication units. To address this issue, the PLI and DLI schemes introduced by the Indian government will not only help the country to move forward but also build the right ecosystem to flourish in semiconductor manufacturing.
This scheme will provide attractive incentive support to companies or consortia that are engaged in the manufacture of semiconductor fabs, display fabs, silicon photonics, sensors and also semiconductor packaging and semiconductor design. The scheme aims to attract existing and global players as it will support their expenditures related to design software, IP rights, development, testing, and various stages of development, deployment of their plans. These investments will create a good opportunity for India to become an electronics manufacturing hub and become ‘self-reliant’ a.k.a ‘Aatmanirbhar Bharat’.
How will this scheme help semiconductor start-ups to mushroom in India?
For the semiconductor industry, India has sought applications from 100 domestic companies, start-ups, and small and medium enterprises to become a part of the design-linked incentive scheme that aims to make the country a semiconductor hub in the coming years under the Chips to Startup (C2S) programme. With the semiconductor industry facing a major chipset shortage the government determined to create policies that will encourage and promote new entrepreneurs to set up their manufacturing plants in India.
How can India learn from other countries (Japan, China and Taiwan) experiences in semiconductor industry?
Semiconductors are all-pervasive in electrical devices and the complexities of the Covid-19 pandemic have unfortunately been straining the industry’s supply and value chains which leads to worldwide chip problems.
Currently, the global countries manufacturing semiconductors are dominated by companies in the US, Japan, South Korea, Taiwan, and the Netherlands. These countries have used the following ways which helped in becoming the leaders in the semiconductor industry:
Taiwan: Taiwan has thrived in the semiconductor industry and the major credit goes to their public policies such as government subsidies, tax breaks, and public infrastructures such as the creation of major research and industrial parks. The companies are focusing on producing chips based on the designs of others with cutting-edge skills.
South Korea: The key competitive advantage of the South Korean semiconductor industry is in the production of memory semiconductors which they achieve by efficiently utilising its workforce in the labour-intensive process of semiconductor manufacturing.
Japan: Japan’s strengths in semiconductors have always been in raw materials that have high requirements for purity, equipment, and small active-passive components. Despite Japan being far behind the advanced semiconductor race, Japan set up the semiconductor manufacturing sites in the world with a total of 84 foundries. These foundries were not at the forefront of semiconductor technology, but they can create consumer electronics for everyday applications.
While India has established itself as a centre for semiconductor research and design, the country is yet to develop a full ecosystem for the semiconductor development and manufacturing. With effective government policies, development of infrastructure and establishment of manufacturing setups at geographically favourable locations like other players, India will soon become a resilient design and manufacturing hub for semiconductors.
What are the challenges that need to be overcome in the semiconductor industry for better power and energy management?
In the past, India’s efforts to chase semiconductors were deterred by India's unsteady infrastructure, unstable power supply, and poor planning. While it has a decent chip design talent, it never built-up fab capacity. Fab plants require a continuous power supply as they run 24x7. Additionally, an entry-level factory consumes more than 20 million litres of ultra-pure water per day and chip manufacturing requires a pollution-free environment and very clean setup. Even a single speck of dust can compromise a chip, costing millions of dollars.
To establish autonomy in the entire semiconductor value chain -- which includes designing, fabrication, testing, and assembly, the government must promise the right infrastructure apart from the financial incentives as it takes a lot of effort like finding the right spots for factories and coordination with states for uninterrupted water and power supply.
What are NXP India's plans for investment and business growth?
Over the years, we have expanded our operations in India to emerge as a team of professional engineers working tirelessly to move up the value chain and become a vital part of the global network of design teams that forms the core of our business operations.
Over the next few years, we will continue to emphasise on strengthening our R&D capabilities, as India is one of NXP's largest design centres, with teams across India sites performing critical hardware and software R&D activities that are critical for global customer projects running in India. Our efforts around technologies, like Radar, UWB and NFC, etc to name a few, will continue in India as we expect to see newer use cases in the future.
Talk us through your India revenue, India business, growth prospects in Indian market and current and future investments in India? How were the past 3 years for you in terms of revenue growth, profit, turnover etc.? What fueled this growth?
We at NXP are geared towards high growth, delivering innovative solutions, and adding value by constantly upgrading our offerings. The global revenue for NXP in 2021 was $11.06 billion, registering a 28 per cent increase over the last year. We have taken a stock of opportunities created due to the demand and furthering government policies, identified the challenges and the pitfalls, charted a roadmap, and are confident to continue the growth momentum. Semiconductors have been seminal in the development of advanced technologies such as AI, Internet of Things (IoT), autonomous vehicles, 5G, and robotics.
In order to best leverage advanced technologies and evolving 5G processes for a seamless transition to Industry 4.0, we remain open for collaboration with various stakeholders. Also, with the Union Budget 2022 announcement, it is evident that the government has realigned its focus on the digital growth of the country creating several opportunities for the growth of the semiconductor industry in India.
