MediaTek is one of the world’s largest fabless semiconductor company. In Q3 2020, it surpassed Qualcomm to become the biggest smartphone chipset vendor driven by its presence in markets like China and India, according to a report by Counterpoint Research. Within India too, it is the largest. Last year, the Taiwanese company said it will be investing $3 billion for its R&D globally.

Amid on-going bilateral talks between the Indian and Taiwanese governments to set up semiconductor fabs in India, BusinessLine spoke to Anku Jain, MD, MediaTek India, to discuss the company’s business here and to understand how the chipset landscape is shaping up in India. Excerpts:

Q

With so many computing devices selling since the pandemic broke and in the middle of chipset shortage, how has the business been for MediaTek in India?

We have seen quite good sales in India and globally. Our revenue globally has gone up by over 2X from $7 billion in 2019 to $17 billion in 2021. Business has been good for MediaTek and we expect this to continue in 2022 as well. User behaviour has been changing over the last two years and it’s a permanent change. I think the consumption of devices based on our chipsets will continue to rise.

Q

MediaTek has two R&D centres in India located in Noida and Bangalore. Can you talk about what kind of products are being developed here and is this India specific?

There are two aspects of what we do in India, it’s all R&D. We have over 700 employees here and more than 95 per cent is in R&D. And then we have two broad verticals — hardware design (chip design) and software design. For chip design, we work on smartphones, smart TVs, routers, wifi etc. To ensure that the hardware works well in the ecosystem, software too plays an important role. For instance, one of our teams is working on 5G chip design and we have to ensure that the 5G modem also works well. 

Q

You have been developing specialised 5G chips. Tell us more about that. Are there partnerships in place in India?

5G has been an exciting space for us in India. Although it has started coming in the news now, we have been working on it for nearly five years. Our first announcement was made in 2019, now we have a bouquet of chipsets in our Dimensity series.

About 80-90 per cent of the R&D happening in India is for working on our global products. Our 5G chip Dimensity 9000 is not only going to be launched in India, but also globally. We have local partnerships with Indian and foreign OEMs who too, have R&D in India. We work closely with them and support them whenever there’s an integration issue.

We have many Indian companies not only in smartphones but also cameras and speakers, we are also co-working and hand holding them if it’s a new product. Some of the OEMs we are working with include LAVA, Micromax domestically, and internationally Xiaomi, Oppo, Realme, Vivo and Samsung.

What are your thoughts on the $10-billion PLI Scheme announced for semiconductor manufacturing? Is the DLI offering good enough for you? 

I had spoken to a few government officials and this time, the intent is quite serious and it also looks feasible. MediaTek is very excited about this if this ecosystem comes to India as the electronics consumption has been increasing here. This is actually adding a lot on foreign exchange expenditure. Once we have more products being built in India, it will help in multiple things, including foreign exchange spend, jobs and more Make in India components.

From MediaTek’s perspective, we can source a lot of components from India locally and we have a large market here. If chips are made in India, that will be incredible. It’s the last frontier left and will help us build the entire product in India. It will be a good advantage for us and we are bullish on this move. I think it will work out.

The design-linked incentive is a well-rounded scheme. And that is specifically for home grown companies involved, I guess. These schemes will help the entire industry and in turn, MediaTek, as talent has always been short in supply.

Q

Are the incentives allotted enough for the foreign companies to come in to set up their manufacturing units? A few industry players are saying 7 NM, 14 NM, 5NM nodes would be expensive to set-up at this cost.

Global companies announcing their chipset manufacturing plans in other countries is a pandemic-induced move. They don’t want to put all their eggs out of one basket or geography. They want to diversify their sources of components. The $10 billion being provided in India is a very good starting point. It is much more than anything offered earlier in India and it should be good enough.

The global players are getting enough incentives, and we will get to know in a few weeks who is applying. I feel the incentive is significant and it should be able to attract some foreign players to India.

The more advanced nodes like 7NM and 5NM would need much investments, but if we can start with a $28NM, it will still be infinite times move. We don’t have a fab yet so any start will be great.

Q

There are bilateral talks going on between the Indian and Taiwanese governments to bring in companies to set up semiconductor fabs in India. How does the geopolitical scenario impact companies like MediaTek and what are your thoughts?

India has welcomed us a lot and we have been in frequent talks with the government from a company point of view. Indian and Taiwanese governments have obviously been in talks regarding the scheme.

I think the government has a very serious intent about setting up fabs in India and in my opinion, they will be flexible on the incentives. They want to make it work and they understand the strategic importance of the move.

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