Qualcomm to outsource chip mfg. in India once fab and Osat facilities built

Global semiconductor giant Qualcomm Inc has said it will outsource manufacture of semiconductor chips in India when the country has set up its own fabrication (fab) plants and outsourced semiconductor assembly and test (Osat) facilities. The company, headquartered in San Diego, US, aims to leverage its substantial scale and requirement for large volumes of chips, bringing its state-of-the-art technology into partnership with leading industry players.

Elaborated on the company’s business strategy for India in a recent interview, Qualcomm India President Savi Soin said: “Yes, once the fab plants and Osat facilities are operational in India, we fully intend to lean into investment opportunities in the country.” Qualcomm’s core competence lies in the design of chips, which are then manufactured to their precise specifications by fabrication plants located across the globe. These plants include, among others, Taiwan Semiconductor Manufacturing Company (TSMC). The semiconductor chips are subsequently sold to a variety of end-users — from mobile device manufacturers to carmakers.

Soin further detailed how Qualcomm was uniquely positioned within India for two specific reasons. “First, we function as ecosystem enablers due to the large scale of chips we produce. The business of fabs is inherently about scale and we have the ability to fill these facilities with our range of products. Second, from a technological standpoint, we are capable of introducing not just one but two leading nodes simultaneously, thereby serving as advanced technology providers to our partners.”

Nevertheless, the company underlines the necessity for additional support from the Indian government to execute these plans successfully. “To create a robust demand for our chips in India, it is imperative that more local brands, which would utilise these chips, to enter the marketplace. This is an issue China did not have to grapple with, given that its plethora of consumer brands allowed companies like SMIC to cater to a large base of original equipment manufacturers without needing to look beyond mainland China,” said Soin.

On affordability in the 5G phone market, Soin said the company had already achieved a milestone with phones priced under Rs 10,000. “The trajectory now is not merely about further reducing the price point, but also about integrating artificial intelligence technology into these mass-market 5G phones to the extent possible,” he said. “In this endeavour, we are actively collaborating with original equipment manufacturers and online retail giants like Flipkart and Amazon to drive down the costs.”

In addition to its efforts in the mobile device arena, Qualcomm has been actively pursuing opportunities in the automotive sector, having already collaborated with two-wheeler companies Ather Energy and Ola Electric. Although India currently represents a smaller part of Qualcomm’s $30 billion pipeline in this sector, the country is witnessing accelerating growth rates. Soin added: “The major disruptions in the automobile industry are driven by software technologies, and there is a tremendous potential for this innovation to be propelled by Indian information technology firms like Tata Consultancy Services and Tech Mahindra.”

Qualcomm, according to Soin, also sees substantial opportunities in the wireless fixed broadband domain. “In homes that are already equipped with fibre-to-the-home solutions, our business case will involve the implementation of WiFi-6 and WiFi-7 technologies. We are also working in collaboration with companies like HFCL and VVDN on wireless fixed broadband solutions, which will offer a considerable opportunity to connect Indian homes in the next two years,” he said. Business Standard