Infineon eyes chip manufacturing in India, plans to double workforce

German semiconductor major Infineon is focused on chip designing and other software-related work through its two global capability centres (GCCs) in India. However, it is also open to manufacturing chips here, either on its own or through a partner, chief executive Jochen Hanebeck said.

Infineon plans to double its India workforce to 5,000 by 2030 while targeting a revenue of $1 billion in the same period. Edited excerpts:

Could you share details about Infineon’s footprint in India?

India is clearly an interesting market and we intend to grow here with the emerging customers and also established customers. We have a sizable global capability centre (GCC) in Bengaluru, with more than 2,000 employees, covering chip design, software development, supply chain, system application engineering and so on and so forth. Then we have various sales offices across the country and on March 24, we opened a second GCC in Ahmedabad and there, we want to grow now in similar global functions. Already 2,500 people are working in India today and we intend to double that in about five years.

What are your investment plans for the coming years?

The investment is for GCCs, which is about some IT infrastructure and the amount will be in millions of dollars, but it’s nothing compared to a manufacturing site.

What are your plans for India? We will look at the whole value chain, from material competencies in India, all the way to chip design, software development. We will make decisions where to position ourselves and where to connect, and I think there are more opportunities and at times, we can talk about it but today, we have celebrated our opening of a second GCC. We feel very good about doubling the workforce over the next 5 years and reaching $1 billion revenue target in India by 2030.

Are you manufacturing your own chips or outsourcing to others?

We have a hybrid model. We outsource when the differentiation is in the design or in the algorithms or in the software. So typically, we outsource manufacturing of microcontrollers. When it comes to power semiconductors or sensors, when the IP is very much in the technology, in those cases we prefer to do manufacturing ourselves.

Is the company considering manufacturing in India, either itself or through a partner, like the Tata Group?

In principle, that’s an option. We have to understand that there are many-many technology flavours and we would really need to see whether there is a match. It’s not one technology, there are plenty of technologies, not only to be differentiated by nanometres or by geometrical dimensions, but also by others. I understand the focus of the Tata factory is 40 and 28 nanometres. In-principle, that’s possible, but whether it really fits, we would need to see.

The Indian government is promoting semiconductor manufacturing by giving financial grants. Is it something that excites you or some changes are needed?

I understand that the front-end factories capture the headlines. But in order to be successful in semiconductors, it really matters that you are building a complete value chain, which starts with materials. There are some companies in India that know how to do materials. Then it comes to device processing, which is what the front-end fab is all about and then it comes to assembly. But then also very important is application and system understanding that ultimately makes a semiconductor industry. For being successful, along with the 4-5 value chains, you need the customer pull, because ultimately the funding will always reach a limit. Every nation wants to be into semiconductors but what matters is that there are customers in India which pool the products through the value chain and also ignite innovation.
Where do you see yourself participating in the semiconductor value chain in India?

We are looking at the different value chains, talking to the local customers and engaging with them. That’s what we have done already over the many years and once we see critical mass coming, then further steps in the value chain will be taken, potentially also at some point, manufacturing. But there I have to say, for the next wave in growth, we are set up in terms of manufacturing.