Indian packaging companies take the lead in promoting independent chip manufacturing

Varun Manwani, CEO of Rajasthan-based Sahasra Semiconductor, said recently that the company will start commercial production of the first batch of Indian-made memory chips in September or early October.

The company has set up a semiconductor assembly, testing and packaging unit in Bhiwadi district. It will initially package basic storage products such as MicroSD cards and on-board chips, and will later move to advanced packaging chips for products such as internal memory.

Sahasra Semiconductor is currently part of India's Scheme for Promotion of Electronic Components and Semiconductor Manufacturing (SPECS), under which it is eligible for financial incentives of 25% on capital expenditure. Unlike Micron, which makes its own chips, Sahasra is more of an outsourced semiconductor assembly and test (OSAT) company, meaning they assemble and package chips for other brands.

"We will be the first Indian semiconductor company to start manufacturing chips. In fact, we did some trial production in March and commercial production will start sometime in September and early October," Manwani said, adding , the company has received orders from small and medium-sized enterprises to manufacture chips for it and is also looking for export opportunities.

The company will invest Rs 600 crore over five to six years to produce chips and build infrastructure around them. So far, Sahasra has invested nearly 1.1 billion rupees to start the first phase of chip assembly and packaging work.

"Now, memory is becoming built-in because all phones and devices are equipped with internal memory, which means the chip is inside. This may be more advanced packaging and we will take advantage of it in the next year and a half. We start with the chip It starts with basic encapsulation,” Manwani added.

In addition to chip assembly, the company is currently designing its own LED driver IC, which is its in-house intellectual property.

Sahasra is also seeking to apply for the Semiconductor Incentive Scheme, where the government will bear 50% of the project cost. "We started construction of the fab even before the semiconductor program was announced. First, we will leverage investments under the SPECS program and then we will apply under the semiconductor incentive scheme," Manwani said.

In terms of supply chain partners, Sahasra obtains equipment from Japan, South Korea, Thailand and other countries, and has Disco Corp, Kulicke and Soffa as supplier partners.

Sahasa aims to generate revenue of Rs 500 crore from the semiconductor business in the next four to five years due to rising domestic demand.

“We will see ourselves as one of the niche players in the OSAT business. We will produce multiple packages, the OSAT ATMP. As we move forward, it will become clear which are the low-hanging fruit we can focus on, rather than pursuing Very advanced software package,” added Manwani.