The Ministry of Electronics & IT (MeitY) has been working aggressively on multiple areas, particularly, to boost domestic semiconductor industry, and the use of artificial intelligence (AI) responsibly.
In an interaction with ET’s Muntazir Abbas, MeitY secretary, S Krishnan, a 1989 batch Indian Administrative Service (IAS) officer of the Tamil Nadu cadre, who took over barely six months back, is at the helm of many prestigious initiatives, and in an exclusive interaction talks on semiconductor ecosystem, mobile components manufacturing, deepfakes menace, and implementation of the Digital Personal Data Protection (DPDP) Act 2023. Edited excerpts
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Let’s begin with the government’s semiconductor ambition. Now, you have biggies like Micron and Tata, so what’s next, and how are you looking at design in India?
There are three distinct parts within the semiconductor ecosystem where one part is a design. There are many companies internationally who now don’t run fabs of their own and simply do design. Large companies like Qualcomm, Broadcom and even AMD have become fabless companies. So, many of them are purely design companies.
In the design space, India has a lot of human resources. And a significant portion of the design work for semiconductor chips is done in India. Many of these large companies employ thousands of people in India. In addition, Indian startups and other companies do design as well but for larger companies, multinationals and others, selling it to them and don’t develop it as a product of their own. So that is one area which needs to work and larger companies from India need to get interested in that area to see whether we can start developing products of our own. That’s when a product of our own comes. So, IP would eventually come for our Indian ecosystem.
Besides Tata, is the government looking for more fabrication (fab) units?
Now, the first fab is going to be the Tata fab, which will be constructed. However, I think we should have at least 2- 3 more fabs established from across the world in different countries in the times to come.
So, is there a timeframe as such? Since we know it is a capital-intensive sector, what more funding efforts are you making?
In the next 2 to 3 years or so we’ll have to try and get 2- 3 more fabs. And fab is always financially a losing proposition, rather than to say losing property. Since it is capital intensive, prone to cycles, it means a lot of patient capital is needed, and therefore the government needs to come in. And this is what the ‘Chips Act’ in the US is where every country in the world is supporting the fab industry. Today, they are supporting the fab industry in Korea, in Japan, with government grants in the US, Europe and everywhere else. So, even if funds under the present India Semiconductor Mission gets exhausted, we have to add and find a way by which more funds are added in order to work further.
So, are you coming up with a revised scheme or just topping it with more funds?
We can increase funds when it gets exhausted. If the cost goes up and we must bring more people in then, we need money, and have to bring in more funds. So, this is the first issue which we need to work on. So, the fab thing is something that we have to continue to work on.
In this context, how do you see assembly, testing, marking, and packaging (ATMP) domain in the country?
In the ATMP segment, three plants are coming up. One is Micron and the other two are called O-SAT (outsourced semiconductor assembly and test), with basically very similar work. One is Tata’s, which is coming up in Assam and the other is CG Power which is coming up in Gujarat. So, these three are coming, but we will need more which will work on other kinds of packaging and chips. Right now, we’re doing some memory chips, which is what Micron is doing and some inner logic chips and other kinds of chips which these companies are doing. But we need many more chips which are meant for automobiles, and power like silicon carbide and gallium nitride. So, for that we will need plants somehow. As the investment may not be as large as in a fab, there will be money available under the present scheme on. So, we can support a few and we can support a few more in due course.
The last bit is really all the materials, the gases and all the equipment needed. So, all of that is another ecosystem completely. And we need to sort of work with the ecosystem players as well to bring this. So, that is the fourth part of what we are trying to do. The fifth element is a large human resource component where we need a large number of people to come in, for the manufacturing of all these items.
So, how are you addressing the talent pool challenge?
See, talent pool challenge is a little nuanced. You have a talent pool for semiconductor design. We don’t have a talent pool yet for semiconductor manufacturing, because manufacturing is also a skilled prospect and people who work in clean rooms know how to manage that. Since we don’t have firms, it’s going to be difficult. So, we’ll have to train more people who work in that space. And that is the other aspect which needs to happen and that will happen now over time.
We have six locations where we have clean rooms set up through various companies, and IITs (Indian Institute of Technology) and IISc (Indian Institute of Science), and through those cleanroom facilities, we are training people. In addition, of course, some people will go overseas to Malaysia and other places as part of this program, get trained and then come back. In other academic institutions also, we’ll have to create a cleanroom environment and a tie up between educational institutions and industry so that they have access to that facility. So, we are also creating those linkages. Then the last bit is we are developing a semiconductor laboratory in Mohali.
Do you have any target for these people to be trained; clean rooms that you are creating?
Yes, I mean as the numbers keep increasing, we’ll keep ramping up.
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If we see companies like Apple and TSMC, they are already coming up with 2-nanometer chips. So, are you getting a sense from these companies to manufacture something of that sort?
We are not going to be in the two or three nanometer chip right now. 28 nanometers is the sweet spot that we have selected. 2-nanometers are really tiny wires requiring more technology, for which we need to go there. Eventually we’ll get there because in the existing Tata facility, they have the way to research and go ahead but it will take some time.
What is the current size of electronic manufacturing in India and what is the opportunity that you are seeing in the next five years?
It’s a little over $100 billion and we want it to go to $300 billion in 4- 5 years.
And what about the mobile phone manufacturing and its value chain?
Today, what is happening with mobile phone manufacturing is that it’s a very large industry in India right now. The Prime Minister has already mentioned that 99.2% of the mobile phones which are sold in India, are made in India. So, we are able to sell, but the value and percentage in the mobile phones is about 15- 18%, where some components are made here while the rest are all imported and assembled here. So, we want to progressively increase this percentage to about 35- 40%.
So, if you take China which is a country with about 40- 45% value addition, we want to be somewhere around 35 to 40% in the value addition. This means more components of the mobile phones will have to get made here. Semiconductors are about 35% of the value of the mobile phone and are increasingly very small chips, some of which we may be able to make, and others cannot be immediately made. Because if you’re not looking at the semiconductor chips, then there are other mechanical parts on the phone like the camera module, a battery, and various other parts which we have to start making in the country.
Are there any new applications from Apple Inc’s components and display makers or ecosystem?
They have plans because Tatas are setting up a big manufacturing facility for them.
Deepfakes is one of the biggest issues today and Prime Minister Narendra Modi also talked about, how are you addressing this issue, and are you issuing some sort of advisories?
We have issued advisories saying that when you offer an AI product, you have to be careful not to give half-developed products which are subject to hallucination or putting down all kinds of things which are inaccurate. So that shouldn’t be an important part of what comes in. The second element concerning deep fakes is misrepresentation, which is something already covered under the rules of IT Act. So, deepfake is nothing but misrepresentation requiring new and better technology. The important thing is to act quickly and see that this misrepresentation is immediately straightened out so that it doesn’t spread too fast.
So, any new advice or direction that you are coming up with?
We just came up with a new advisory to social media intermediaries on 1st of March.
In Quantum Computing, C-DAC has developed a sort of quantum simulator?
Yes. And the intention there is that it enables people to build algorithms and figure out how computing should be done in a quantum environment, but it’s not quite a quantum computer. The quantum mission is being led by the (DST) Department of Science and Technology.
But what are your top 2- 3 priorities that you would like to do in the next 2- 3 years?
Firstly, we have to make sure that now the three projects which have been given approval by the Cabinet are immediately grounded and work on that goes smoothly and we are able to achieve those objectives. Then we are to work on whatever is possible on artificial intelligence (AI) and how to take it forward. This is an important area in terms of emerging technology. Third, we have to ensure that cybersecurity alertness stays and is maintained at the front end. Lastly, once all this happens the DPDP (Digital Personal Data Protection Act 2023) rules will have to be put out and the process to complete the DPDP Act will have to be implemented. We’ll have to draft a new Digital India Act and make sure that it goes and gets cleared in the Parliament. And fifth is to try and have a project or a program which will support manufacturing of electronics components.
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How are you looking at AI regulations because people talk about using AI responsibly. So, how do you think light-touch regulation is feasible as global stakeholders are involved?
The thing about regulation as far as we are concerned, is that we don’t want to stifle innovation. At the same time, the use of AI cannot create user harm, and these are the two things that need to balance. In the process of regulation, the important thing is that the intention of something being labelled as having been brought out by application of artificial intelligence technology should be made clear when something is put out. A clear labelling, clarity, disclaimer, and sort of metadata which you can’t remove and pretend is real, is crucially required. Because intent is everything and ultimately, artificial intelligence is used for making all our movies and all the special effects have some forms of artificial intelligence which we like to watch and believe. Since we know it is fictional and not real, it is alright; but the big issue arises only when it’s used for a bad purpose or when it is used without indicating that it is artificially or synthetically created.
