When India's dream of becoming semiconductor powerhouse was shattered

Vijay C Roy

Chandigarh, October 7

The proposed $20-billion Vedanta-Foxconn semiconductor fabrication facility at Ahmedabad hogged the limelight, but not many would be aware that India’s dream of becoming global semiconductor leader was conceived way back in 1976 and it has a Punjab connection.

The goal

Semiconductor Complex Limited’s goal was to eventually design and manufacture leading-edge circuits and electronics. Their vision was that the company could be the foundation for a native Indian electronics industry.

What the probe report said

• The SCL employees’ union felt the fire could not be controlled due to mismanagement besides lack of initiative on the part of CISF unit
• The Mohile panel headed by the retd Major General of the Defence Fire Research Institute blamed the mgmt for its failure to control the fire
• The panel ruled out the possibility of any external sabotage and said the fire could be the result of an accident or short circuit
• It found serious lapses in the firefighting arrangements at the complexes, which were completely engulfed in fire. It also completely cleared the CISF

The Union Cabinet, chaired by Prime Minister Indira Gandhi, approved the formation of a semiconductor complex to drive India’s ambitions to manufacture semiconductors and the time was appropriate as Taiwan, Israel, Korea and even China were nowhere near being the semiconductor powerhouses that they have become.

Things got off to a promising start, when Mohali was selected and a 100 per cent state-owned enterprise, Semiconductor Complex Ltd (SCL), started production in 1984 to achieve India’s dream of becoming a global semiconductor manufacturer. SCL in the early 1980s had the advantage in that everyone else in the rest of the world was not too far ahead of them.

However, the dream was shattered in a mysterious fire that broke out at the SCL in Mohali on February 7, 1989, causing heavy losses to imported equipment and facilities estimated to be worth Rs 60 crore.

It was reported that officials of the Intelligence Bureau (IB) visited the SCL to assess the reasons behind the devastating fire. According to reports, nothing conclusive came out regarding the cause of the fire.

MS Bitta, the then president of the Punjab Youth Congress (I), had then demanded a judicial inquiry into the fire as a result of which Punjab had lost its prestigious unit.

The SCL employee’s union in a memorandum submitted to the ministry ruled out the possibility of any internal sabotage in the devastating fire that rocked the unit on night of February 7. The union, however, felt that the fire could not be controlled due to mismanagement besides lack of initiative on the part of Central Industrial Security Force (CISF) unit.

After the incident, the then Minister of State for Science & Technology, KR Narayanan, said the SCL would go back to production soon. Putting an end

to speculations, he added that new technology would be introduced and assured the employees that there would be no retrenchment. However, it took eight years and finally in 1997 it was restarted.

Trying to make up for lost ground, the government even wanted to sell a part of SCL’s equity in 2000, but potential private investors could not come to an

agreement with the Indian government on terms, according to experts. According to insiders, the inordinate delays by the successive government stalled India’s dream.

Then finally in 2006, the company was restructured as a research & development centre within the Department of Space. SCL was renamed to “Semiconductor Lab”.