How Strong Project Management Can Accelerate Semiconductor Projects
India missed the semiconductor bus in the early boom of 80’s and also underestimated future risks of not investing in global semiconductor push in 2005-2010. Covid had thrown hard reality of high dependence of semiconductor chips from outside India. That national threat provided enough thrust to become “Atmanirbhar” in semiconductor products. Indian Government took the right and urgent steps in 2021 by bringing incentive scheme and now more incentive such as Semicon 2.0 in 2026.
The high-tech industry brought different and technically advanced challenges in India. For setting up semiconductor facility, technology can be outsourced via collaboration. But the backbone of any industrial revolution is to have peripheral ecosystem to set up such manufacturing facility and continuous support is required in running such industries. The nearest such experienced ecosystem was with few companies who are part of the service providers to PV cell industries which uses similar kind of gases, chemicals, waste gas and water treatment systems and requires high level of safety and quality in delivering such special utilities. However, all such ecosystem had to develop themselves quickly to reach the level of semiconductor industries to avoid dependence of foreign utilities suppliers. Such industries had to overcome many challenges in the process. Incidentally, a few special utilities companies rose to the occasion and did the course correction to be ready for the semiconductor industry.
“New advanced industries will succeed only when the local ecosystem is also developed with them, and it is not dependent on foreign vendors. Development of local ecosystem is beneficial for all, especially for quick support during the running of a plant.”
This article will aim at focussing on the challenges faced by the industry and how to overcome it.
- Understanding the new standards: Globally, industries are designed and installed by legacy standards like ASME, ASTM, API etc. With the advent of semiconductor industry, need for new, relevant and specific standards arose, resulting in “SEMI” standards. This forced utilities service providers to learn new standards which are hardly applicable in any other industries operating in India. Without the knowledge and experience, it was not possible to support the new semiconductor industries. Similar situation had occurred during the installation of the solar cell manufacturing plants in 2009-2010. The customer had to pay high costs for services from foreign vendors even for orbital welding services. At that time a new Indian company established in 2009, started focussing only on high tech industry like PV cell manufacturing. Few of the focussed Indian utilities installation industries invested the time and money to understand these standards. Almost all the equipment required for the transfer of speciality gas and chemicals were coming from outside. But few companies put in a lot of effort and started making equipment as per SEMI standards.
- Skills and knowledge: The Indian industry has not gotten a chance to work for the advanced companies like the semiconductor industry. This has created a challenge in terms of knowledge and skill required for the design and installation of the semiconductor company. Some companies invested into development of skills and knowledge through experience gained while working in the semiconductor factories in Singapore or Israel. This experience has helped them to train the Indian team to be ready for strict guidelines for installation of utilities for semiconductor industry.
- Importance of facilities for the assembly of SEMI approved equipment: Due to the stricter compliances on particles, utility contractors built the cleanroom to the class of ISO 4 standards. Companies started collaborating with Indian research facilities like DRDO & IISC to develop laboratory scale process tools. This step gave companies the confidence to face customer for installation of facilities for semiconductor unit.
- Getting material for the semiconductor industries: India has many and big companies for manufacturing of pipes and tubes. Let alone valves and instruments, none of these can provide electropolished tubes required for the semiconductor requirement. India does not have any company who can provide the SS tube or the PFA tube or even the PP grade pipes suitable for this industry. This makes the work of the utilities contractor difficult in terms of meeting strict timelines. Firstly, they must prove the customer that whatever we produce in India is not suitable for such industry and on other side to convince the customer for premier price for such high purity material. The cost of such high-quality imported material is several times higher than that of a similar but unsuitable variant in India. Fortunately, a few contractors having the experience in a similar smaller version installation like SCL, Cense could explain and convince customer to pay more.
- “ L1” paradox: The problem started with a customer who is putting up such industry in itself. Very few including the purchase team of a customer could qualify as “Right fit” to understand the difference in quality requirements between conventional industry and the semiconductor fabs. India has very few vendors that understand such high-tech requirement of a semiconductor industry. Due to the lower understanding of quality and safety requirements, supply chain personnel started “qualifying” service providers from the oil and gas and pharma companies. Neither the customer nor such vendors understood technical requirements, hence the cost of the installation was quoted low. Due to the typical simple criteria of selecting vendors based on “L1” price, qualified vendors find it difficult in convincing the customer to agree for a higher cost.
Incidentally, suitable qualified vendors had the experience in convincing a customer to make them understand the quality and the safety requirement during solar cell manufacturing wave that began in 2012. They used similar way of “educating” the purchase community of the semiconductor industry about the technical differences between pharma/oil / gas with high tech industry like semiconductor. Though late, this eventually bore fruit and the customer started acknowledging higher cost of installation and some way dodging greed of the L1 selection.
- Understanding realistic timeline for a project: Understanding the sequence of installation is very important to understand the overall timelines. Most customers or PMC selected for the semiconductor projects have an experience of building large refinery or industries successfully within the timeframe. Hence, they were confident of “construction timelines” of the semiconductor factory too. This half information resulted in unrealistic commitment to stakeholders including the Government bodies, creating false sense of urgency. When a customer started approaching speciality vendors and gotten information of the structural requirements, customer often could not believe the course corrections to be done within the timelines. But all the additional timelines were not agreed throwing challenges to vendors to meet the strict and unrealistic timelines. Special utility vendors had to re-invest themselves with the additional special skill manpower, doing additional work to match the committed timelines.
- Ever changing the requirement of hookups: Though FUM (Facility Utility Matrix) was shared with the vendors, everyone including the customer installation team got surprised of getting different hookup utilities requirements, sizes of hookup and end connectors after opening the process tools for installation. Few ecosystem vendors had an experience of such shock during the solar cell process tool installations. Based on their experience they were somewhat prepared with alternatives with changes or at least information of sources to get such material quickly.
- Misunderstanding of quality of utilities and material required: Since most of the customers or their employees had come from a standard established industry like pharma and oil and gas, they came with a fixed mindset of quality of utilities for the semiconductor industries. Vendors had to educate them in differences such as “ Pipe” and “ Tube” or UPW quality in terms of impurities requirement. Even installation practices to be changed from counting “inch weld” to advanced method of “Orbital welding”
- Acceptance of young blood by stalwart and experts of conventional industries: New semiconductor customers employ experienced and mature engineers from the conventional companies. They have a lot of resistance in accepting new skills and techniques. Most of the specialty utilities contractors employ young engineers to train them in the new advanced industries. It is easy to develop skills in fresh engineers than to train the already experienced engineers. When such young engineers are deployed as project managers at project site, veterans were once reluctant to discuss projects with engineers half their age.
Speciality contractors had to convince them, with examples, that fresh blood is more competent in new age industries.
Every new type of industry throws challenges. It is important that all the stakeholders work together and support each other without prejudice to develop the ecosystem. Indian government has taken the right step by announcing the Semicon-2.0 incentive scheme which will help in the development of the ecosystem in India. New advanced industries will succeed only when the local ecosystem is also developed with them, and it is not dependent on foreign vendors. Development of local ecosystem is beneficial for all, especially for quick support during the running of a plant.