Solar Manufacturing - A Driver for India's Semiconductor Industry

Jan42011

The history of the semiconductor industry in India dates back to the 1980s, when multinational giants from the U.S. started outsourcing chip design and software development to India, so that the country’s technical talent pool could be tapped. Initially work in this area was centered on software development directly tied to hardware. It included development of automation tools, modeling and simulation, and embedded software, to name a few products. Over the years, the scope of these projects has expanded with several semiconductor companies in India adopting high-end product development. Since its origin in the country, the industry has been growing at a steady pace. The ISAFrost & Sullivan report estimated the Indian semiconductor market to be worth $4.56 bn in 2007. This figure rose to $5.9 bn by 2008 at a compound annual growth rate of 13.4%, and to $7.59 bn by 2010.

Meanwhile, many semiconductor companies in the country also started packaging their chips with add-ons that included applications, reference designs, and performance/power optimization tools. This captured the attention of several industry players, who realizing the potential of a huge untapped domestic market, have been working collectively towards the development of the entire semiconductor ecosystem. While improved government policies and incentives have set the stage for semiconductor manufacturing in the country, there is a long way to go before this can become a full-fledged reality.

Growth in electronics is essential for the manufacturing industry to thrive. Therefore, it is essential to focus on the strength of the electronics industry.

Interestingly, there is a great deal of synergy between semiconductor technology and solar photovoltaic (PV) technology. Solar manufacturing and semiconductor manufacturing are interdependent, since similar equipment and technologies are used in both. The manufacturing infrastructure for solar production is less stringent than that of chip manufacturing. And unlike in the semiconductor space, where high setup costs have kept the private players from establishing fabs, the solar industry is more economical and practical in terms of the initial setup. Moreover, solar energy is abundant in a tropical nation like India. This means that we can reap the benefits, and recover our investments much faster.

Solar energy is a very viable form of alternate energy available to us. It may help resolve the current energy crisis in the long run. Solar energy has long been heralded as a centerpiece of the green revolution a utopian vision of clean and abundant energy.

The Indian government has realized the importance of tapping this resource, which is evident with the launch of the National Solar Mission (NSM), and the recently released guidelines for grid connected and distributed/rooftop system. This has helped in providing a new direction for the sector. The targets are tough but achievable. The biggest challenge is to bring down the cost of solar power. The key driver to build the solar ecosystem in India is to have a huge local market. Local demand will fuel the industry and scale it to make it sustainable and profitable. Cost reduction can be achieved by nurturing local manufacturing, increasing scale, and reducing balance-of-systems costs. If we meet the targets set out by the NSM, the solar energy sector will grow rapidly like the telecom sector. Such strong domestic demand will fuel the growth of a strong manufacturing ecosystem in India.

Solar energy can also bring in a host of new job opportunities. It will have the potential to drive economic development, and create jobs while enabling utilities to achieve their renewable portfolio goals. Since the solar thrust has gained momentum recently, right planning, along with investments and judicious implementation, will help India gain and retain technology leadership in the global community.

 

Categories: