Start Semiconductor Manufacturing Business
What is a Semiconductor?
Semiconductor, you must have heard or read this name many times – in physical science, in the study of electronics or in everyday life. When you would have gone to get your damaged electronic item repaired, the shopkeeper would have told you that almost every electronic device contains semiconductors. In the language of electronics, the things or metals which are good conductors of electricity, i.e., the things through which electricity is conducted well are called conductors, such as iron, gold, silver, copper etc. The things which do not conduct electricity at all are called insulators, such as plastic, wood and glass, and the things through which electricity is conducted very little or not at all, are called semiconductors.
Semiconductor Manufacturing Business:
Today in this article, we will tell you how to start a semiconductor manufacturing business? So let’s start.
Semiconductor market prospects
Semiconductor Market, The demand for semiconductors in India is around $24 billion and will reach around $100 billion by 2025, but most of the country’s needs are met through imports instead of manufacturing. But in recent times, a lot of interest has been seen in semiconductor manufacturing and by April 2021, many companies have submitted their expression of interest for semiconductor manufacturing and designing so that manufacturing plants can be set up. Semiconductors and chipsets are used in almost all modern electronics devices, they are used in all types of electronic products, IT hardware, defense technology, industrial electronics, medical electronics, workplace, healthcare, manufacturing etc. industries. According to the India Electronics and Semiconductor Association (IESA), the consumption of semiconductors across the country was around $21 billion in 2019, which is growing at a growth rate of 15% every year.
Types of Semiconductor Business
Semiconductor business can be done in two ways. One, you can import already manufactured semiconductors or buy them from an Indian manufacturer and market them or set up your own manufacturing plant. Indian companies like Samkhya Labs, ASM Technologies, Broadcom Inc, CDIL Semiconductor Laboratory are leading brands in semiconductor manufacturing.
Semiconductor Manufacturing: Essential Information
Now let’s talk about manufacturing, so you should know some things about it – this is a business costing crores. A lot of money is required to start semiconductor manufacturing work. A huge investment is required in semiconductor fabrication work because very advanced manufacturing machines are required to make them, along with this, an environment has to be created to make them where there should be no dust and other dust at all because in such a situation semiconductors can get damaged. This is because their functioning is very fine and even a small particle of dust can spoil their working capacity. The temperature and humidity of the place where they are manufactured also has to be kept under control so that static electricity can be reduced. After manufacturing, they also have to be tested which is done by machines only because it is not possible to get this work done by people or with open eyes, a robotic system is required.
Resources and costs required
Manufacturing is required on a large scale. Even if semiconductor manufacturing is started as a startup, their manufacturing has to be done on a large scale because there is so much demand for them in the market that by producing them in small quantity, you will not be able to create a balance between demand and supply. Most of the demand of this billion dollar industry is met by imports. That is why if you want to survive in the market, you will have to play on large volumes. Cheap labor will be required. Although there is no shortage of cheap labor in India because the population here is the second largest population in the world, but there are many sectors where skilled and educated manpower is required, such as semiconductor manufacturing. If educated and highly skilled manpower is available for this at a low cost, then any company can reduce its production cost. Apart from this, a lot of money is spent on training the employees. This industry requires Very Large Scale Integration i.e. VLSI training, which is very useful for the B.Tech graduates coming out every year in India. rarely available
Apart from the degree, a lot of money and time has to be invested in soft skills, management skills, product realization etc. In India, there is still a huge shortage of skilled professionals as per the requirement of the semiconductor industry. Raw materials are the most basic thing for semiconductors – silicon and raw materials like germanium, gallium, antimony, arsenic, boron, carbon are required. These raw materials have to be imported from abroad, which costs a lot. Getting all these materials from countries like Japan, Mexico, Australia is also very expensive. We also have a lot of dependency on China. The government remains quite evolved in all these processes. At the same time, emphasis is being laid on creating domestic markets within the country itself.
Many types of gases used in making semiconductors have to be imported from abroad, whose production is negligible in India even today. The manufacturing process of making semiconductors used in the electronic industry around the world is also quite complicated, which includes things like design and creation, patterning, wafer fabrication, device insulation layer formation, transistor formation, assembly and testing, and a manufacturing unit requires electrical engineers, software engineers, technology support, sales and marketing, applications engineers, designers, materials management, fabrication and production, quality assurance and administrative professionals. For all these things, any company should have a good financial backup so that the company can easily carry out its operations at every small and big step.
For making semiconductors, equipment like dicing machines, dicing blades, dropping machines, polishing grinders, high rigid grinders, vapor edge grinding machines, oxidation systems, epitaxial reactors, diffusion systems, ion implantation equipment, physical vapor deposition systems, chemical vapor deposition systems, photolithography are imported from foreign countries. This machinery is expensive and their maintenance is also very costly, and most of the companies manufacturing them are also from foreign countries, such as Tokyo Electron, Lam Research, ASML Applied Materials, KLA, Tancor Screen Holdings, Plasma Therm Autotechnology, Daifuku, Teradyne Advanced Test, etc.
Company Establishment and Government Policies
Now let’s talk about company establishment. To manufacture semiconductors, first you will have to register your company, along with which you will have to fulfill requirements like trade license, GST, taxation in the name of the company, EIC i.e. export import code, licenses related to manufacturing, registration in MSME, brand name and logo. For such big work, you will need to set up a private limited company or LLP. We have already made a case study article on how a private limited company is formed. If you search on the channel, you will find it. Next is buyers and customers. Before starting manufacturing, any company will have to find customers or buyers for its products, according to whose requirements you will have to design and manufacture semiconductors.
Not only this, your products should be able to compete with big joints like Intel Corporation, Samsung Electronics, Toshiba, Qualcomm so that the products made within the country meet the needs of your clients and are cheaper than imports. Next is suppliers and partners. If you do not want to go into direct manufacturing, then you will have to find such suppliers from whom you can get semiconductors at a cheaper rate and you can earn profit by finding clients in India and fulfilling their demand. There are many companies that can help you set up your business with complete planning for semiconductors. Any Silicon is one such website where you will get services on supply chain, testing, packaging, qualifications analysis related to semiconductors. Do not take client solutions lightly. As a company, whenever you go into manufacturing, it is important to understand the needs of the client. Never start production without meeting a client and understanding their needs. Even a small change can cost you dearly.
That’s why understand your client deeply, what they want, understand their points, then go for designing and manufacturing only after the client’s approval so that your product turns out to be perfect; this will not waste your time, money, manpower and effort because a mistake on such a large scale can spoil the company’s image. It is important to know the Government policies, in 2017-18 to promote the semiconductor industry, the Central Government increased the Union Budget to Electronic Department Fund to $111 million; along with that, an incentive of around one and a half billion dollars was also announced for increasing investment in the semiconductor industry, creating employment opportunities and reducing imports by 2020.
Apart from this, the Telangana government had announced to set up prototype centers for semiconductors in Hyderabad and the central government had also announced the Promotion of Manufacturing of Electronic Components and Semiconductors program. The more information you have about such policies and schemes, the better you will be able to plan your business and take advantage of government policies.
This industry is so big, complicated and vast that it is difficult to sum it up in one article. That is why we have covered almost all the points and brought the necessary information to you friends, we hope you liked the article, please share it
