MeitY re-initiates talks with BCG to modernize SCL Mohali

Moving ahead with its plan to upgrade Semi-Conductor Laboratory (SCL) Mohali to higher node chip technology, the ministry of electronics and IT (MeitY) has re-initiated talks with Boston Consulting Group (BCG) to design a modernisation plan for the fab, officials said.

As per the contract, the consultancy firm will now come up with a request for proposal (RFP) document, inviting semiconductor companies to partner with SCL for 28 nanometer chip technology and its operations. The contract fee BCG will be paid for this modernisation exercise is expected to be about Rs 15-20 crore, an official said.

MeitY and SCL officials recently held a meeting with BCG on the future direction SCL needs to take in the 28 nanometer technology. Currently, the government is deliberating the chip manufacturing capacity SCL needs to have in the 28 nm technology and whether the fab will also serve private sectors as well as exported.

The plan is to rollout the RFP by August. Earlier too, MeitY floated an expression of interest, where companies such as IBM and IMEC Belgium expressed interest in partnering for developing the 28 nm technology for R&D purpose. Besides, Tata group and Tower also expressed interest in modernising SCL.

The partner will not help with the technology but would also be required to support SCL in operations, an official said.

The modernisation and upgradation would need augmentation of the existing fabrication unit, which means replacing the decades-old equipment; finding a technology partner for 28 nm fab, and getting crucial raw materials for the fabrication locally to reduce the import costs and improve the yield for customers. Currently, limited fab capacity is also one of the reasons which restrains SCL from fulfilling any large orders.

SCL is currently serving strategic sectors like space and satellites, railways, and telecom, among others by supplying them with 180 nm chips. According to officials, if the government decides to take SCL’s capacity to 20,000 wafers, the planned investment would be around Rs 20,000 crore. Currently, it rolls out 700 wafers per month — 180 nm. Wafer acts as the foundation for creating chips. Chip manufacturing starts with wafer preparation.

The government has earlier earmarked $1 billion (about Rs 8,000 crore) for SCL modernisation.

Even as the government is deliberating on the capex need for SCL modernisation, one such role for India’s first fabrication facility is clear, that is to support startups and industry for R&D and prototyping.

“The government has a clear vision to modernise SCL that will be at par with global standards,” IT minister Ashwini Vaishnaw had told FE in April.

SCL has two fabrication lines — for 6 inch and 8 inch wafers — an ATMP unit, and a compound semiconductor unit. For building the new fab unit, SCL is scouting for land near its existing facility.

Officials said the land which SCL has found nearby is worth about Rs 250 crore and is under liquidation. However, there are certain issues with the land acquisition, which are to be resolved before proceeding further, they said. Financial Express