Design has to be understood as a high-value activity preceding manufacture that deserves to get pride of place in Make in India
Invecas, a Hyderabad-based startup, is designing a 7-nm chip for GlobalFoundries, which manufactures integrated circuits for the likes of AMD, Broadcom and Qualcomm.
What is special is the cutting-edge nature of the startup’s work, not its size or scale. The latest Intel chip, codenamed Kaby Lake, uses 14-nm technology. The next nodes in this progression are 10-nm and 7-nm technologies, and displacement of silicon with other materials.
While a single sub-10-nm transistor has repeatedly been demonstrated since 2002, it has not been scale up to production levels. So, Invecas has lessons to offer for Make in India.
That lesson is that design has to be understood as a high-value activity preceding manufacture that deserves to get pride of place in Make in India. To the extent, Invecas is doing R&D for GlobalFoundries, the intellectual property would accrue to the US firm.
Suppose such cutting-edge work were being done by Indian companies for themselves or other Indian companies that can afford to take the risk of investing large amounts of money in R&D without assurance of immediate success. Then would Make in India create real, sustainable value.
Right now, with an antiquated mindset, India accepts as indigenous manufacture the slipping in of a battery in its designated slot of a separately imported complete cellphone unit, before the back cover is snapped on. Of course, this, too, is manufacture, but not one that will create significant value or upstream or downstream value chains.
GlobalFoundries was formed by merging the divested manufacturing arms of AMD and IBM with another firm. These units were divested because their parents found their manufacturing activity to be of low value. The further commoditised the manufacturing, the lower the value added at that stage.
Designing the manufacturing process or designing the technology deployed in the manufacturing is where the highest value resides. Indian workers are equal to the challenge of creating such design, but Indian entrepreneurship is not. This is where Make in India must intervene.