Industrial and medical gas manufacturer Inox Air Products (InoxAP) is one those companies in India which are actively making efforts to leverage their existing capabilities to develop semiconductor supply chain in the country. In an interview with Outlook Business, InoxAP Managing Director Siddharth Jain talks about the company’s efforts in sourcing the gases required in semiconductor manufacturing, the challenges it is facing and what India needs to develop a strong chip supply chain. Edited excerpts:
India Makes Only 10% of Gases Needed for Semicon Chip Production: Inox's Siddharth Jain
The country produces 5 semiconductor grade gases out of about 50 needed, Jain says, adding that Inox AP is investing heavily to make an import supply chain as setting up plants may take a long time
Inox Air Products Managing Director Siddharth Jain
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How is InoxAP using its gas manufacturing experience in the semiconductor supply chain?
Industrial and medical gas production is now moving to industrial and electronic gases and we are going to be the leading player.
We manufacture five gases but the demand in semiconductors is close to 50. The rest we do not make in India.
These gases have never been spoken about in India in the past. So, we have to first go and find technology tie-ups abroad. Obviously, China, Taiwan, South Korea, and America are the countries (making such gases). So the countries that make chips also make these gases.
How different is it to produce gases for semiconductor plants than for medical and industrial use?
Electronic (specialty) gases are very different and complicated gases. These are ultra-high purity gases. The manufacturing technology for those gases is totally different from the manufacturing technology that exists in India today to make those industrial and medical gases.
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Have Indian companies started to make these gases locally?
Initially, we will have to import all the gases because setting up these plants takes a very long time. It also requires a demand. Tata (chip fabrication unit) is the only one coming up in India. We can't manufacture forty gases for that.
I need 10 semiconductor plants before which I can start manufacturing. Till such time, we will have to tie up with various technology partners and import product from them.
But we (Inox AP) are the leaders in this. We are investing heavily in it. Inox AP is already working very closely with the government and their end customers to make this happen.
InoxAP has commissioned India's first ultra-high purity electronic grade nitrous oxide plant. How will that play out for the company and the semiconductor industry?
Solar cell industry requires certain gases such as ultra-high purity nitrous oxide, ultra-high purity ammonia, etc. Earlier, these gases also were not manufactured in India.
We decided to take the first step and set up a manufacturing line to make that product (nitrous oxide) in India. We are the first company in India to make that gas. And this product will also be used for the semiconductor industry going forward.
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Are you in talks with these companies that are going to set up chip manufacturing plants in India?
Absolutely. We are in talks with all of them because we are an essential component of the entire supply chain.
What steps are you taking to source these gases to India?
We have started work on developing the supply chain of these gases. These are very dangerous gases. They require extremely highly specialized packages in which they can be brought to India. They cannot be air freighted. The only way to develop the supply chain is by sea. So, when you have to develop this supply chain by sea, you have to first identify what kind of package it can come in and what is the sea route it can take from which country. So, all our work has happened on developing that supply chain right now. Making these gases locally is the step two.
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Have you earmarked any amount to invest in this technology?
It depends on the number of fabs that comes up. So even for just one fab like Tata’s, our total investment in everything put together will be well around Rs 500 crore. The amount will increase as the number of customers grows. But when it comes to manufacturing, I cannot make a comment on that right now because I actually don't know. The amount required will depend on the demand. But it will be in thousands of crore if I have to manufacture all 40 gases in India.
What does India needs to have a strong semiconductor ecosystem?
That ecosystem does not exist in India today. It needs to be created and it needs support in the form of government subsidies, skill set development, collaboration with many other countries. But most importantly, it requires the entrepreneurial spirit and the risk taking ability, which Inox Air Products has.
We are the ones who've taken the lead in this industry. We don't have any contract from anyone right now. We're doing all this effort simply to be to assure the country that we will invest in the technology and the supply chain to ensure that semiconductor plants get successful.
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How do you see the government supporting this?
Currently, the government subsidy at the central level is available mainly for investments in the fab units. We have been pushing the government strongly to include the ecosystem as part of the subsidy as well.
Hopefully, SPECS 2.0 will include the investment in ecosystem as well as part of the subsidy.
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