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Business News/ Companies / News/  CDIL to expand chip ATMP; fab plans later

New Delhi: Continental Device India Pvt. Ltd (CDIL), India’s oldest semiconductor company that moved away from wafer fabrication 15 years ago, may set up its own fab in India in the long term, a top executive said, provided an enabling ecosystem comes up in the country. In the meantime, it is focusing on its local ATMP (assembly, testing, marking and packaging) business, expanding its 500 million unit capacity by 100 million units more.

The company will bank on the government’s production-linked incentive (PLI) scheme and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) to set up two new ATMP lines, Prithvideep Singh, general manager, CDIL Semiconductors, said in an interview.

“We’ll be adding 100 million units capacity. In this particular plan, the first phase has already been installed. Fifty million will be coming within another six to eight months and subsequently another 50 million," said Singh, the grandson of Gurpreet Singh who started making silicon chips and devices under CDIL in 1964 in collaboration with Continental Device Corp. of Hawthorne, California, which was later called Teledyne Semiconductor Co.

The Indian company’s expansion comes close on the heels of global player Micron announcing an ATMP unit in India with an investment of over $800 million over five years. Singh did not disclose the investment his company will make for adding the capacities.

On being asked whether CDIL was looking at building a fab in the country, Singh said while the company was considering the possibility since they had expertise in it, having operated a local fab in the past, the decision would be contingent on a number of factors.

“It’s something we’re considering. We would love nothing more than to have two to six assembly lines in India and then have a wafer fab which could supply products to them. Right now, if we set up a wafer fab, we will take what we take internally for our products and then somewhere, we’d have to have the rest of the capacity," he said.

He also noted that all raw materials required for fab and ATMP manufacturing are imported, starting from chemicals to moulding equipment to epoxies, and the local infrastructure as well as service teams required to handle the processing of the raw materials were absent.

For the next year to 18 months, the company will focus on scaling up its ATMP lines.

“To expect the entire ecosystem to come through on one company’s shoulders, I think, is a little bit of a stretch. So, our goal is to expand our ATMP lines. We have a good know-how, a solid base, a good brand, both locally and globally, and to build on that legacy and use this opportunity to increase what we can increase in terms of market share in terms of our product portfolio, in terms of the types of products we’re doing," he added.

CDIL currently makes discrete semiconductor devices including transistors, diodes, rectifiers, Schottky diodes, thyristors, voltage regulators, transient voltage suppressors and MOSFETs, with specialities in power semiconductors and high-reliability components that are used primarily in the power electronics sector. Simply put, the company makes interconnects that manipulate current and voltage so that equipment that requires high power to function can work.

The power requirement of such equipment, used for instance in the automotive or aerospace industry, is far higher than that needed for laptops or phones. Hence, the integrated circuits or microchips or chips are larger in size—in micrometre—such that they don’t burn up while managing high current or voltages.

While it used to operate one of India’s first silicon chip fabrication units back till 2008, the company pivoted to a fab-less model, which basically meant designing the chips in India and getting them fabricated elsewhere. Singh attributed the change in model to high levels of low-cost imports following liberalization, which also led to the downward trend in the fortunes of many Indian-owned brands and companies of that time.

CDIL deepened its focus on assembling, testing and packaging soon after and has set up over 12 such lines since, producing 500 million such units every year. “CDIL has established an advanced high reliability (HiRel) and testing laboratory located at Mohali in addition to its NABL-accredited facility in Delhi. The HiRel laboratory is a crucial part of qualifying CDIL’s devices for stringent sectors like automotive, defence and aerospace," he said.

Singh noted that CDIL was the first company to supply to the Indian Space Research Organisation, the first silicon company in India and the first to export semiconductors. Till 2015, it exported 70% of what it made in India to countries like the US, the UK, Germany, China, Hong Kong, Japan, South Korea, South Africa and Egypt. But due to the rising local production of electronics since 2016, CDIL’s share of local production has risen to the extent that about 65% of what it produces today is consumed locally.

Singh added that the company was expanding in India at a time when local as well as international demand was rising. Further, India’s position as a low-cost manufacturing destination for electronics and semiconductors, coupled with government schemes that were offering incentives and subsidies and the country itself offering a large domestic market for supplies, had triggered the need for expansion of its capacities.

“The government has also fuelled some of this in terms of the domestic consumption. They’ve got localization and indigenization clauses in many of their tenders, whether it’s E-meters, whether it’s LED lights," he said.

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Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 19 Sep 2023, 06:00 AM IST
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