The Product Mastery Manifesto: The Product Pivot

The chip epoch has begun. The Indian digital economy is reaching a significant level of growth. The nation is demanding propulsive force in semiconductor self-reliance. This mandates an industrial pivot towards advanced fabrication and packaging. The initial, critical springboard is Assembly, Test, Mark, and Pack (ATMP)/OSAT—the foundation of all final chip products.

The national strategy focuses on accelerated capacity scaling via global subsidies. Monetary allocation is merely the opening gambit. The decisive factor transcends subsidy economics; it relies on the flawless execution of a localised, product-centric strategy. Veteran semiconductor leader and CEO of IVP Semi, Raja Manickam, provides the definitive blueprint.

His perspective is incisive and solution-driven. He argues that the current scale-and-subsidy model risks capital flight and fosters brittle mega-factories. The path forward requires a paradigm shift: from merely securing job work to cultivating a product powerhouse. He remarks, "Would we be building manufacturing factories using government funding to subsidise global chip companies? Alternatively, we could have Indian semiconductor companies that are growing and driving demand."

Bailing Out of the Import Trap

India faces immediate operational challenges that are fundamentally structural, particularly concerning the use of public funds. Currently, the ATMP units primarily belong to the legacy packaging category, and they source essential equipment from global suppliers. Manickam identifies a critical issue, noting, "My concern is that India does not manufacture any equipment used in ATMP. All equipment is imported."

Consequently, government subsidies intended for ATMP developers ultimately serve to procure equipment from foreign firms. He argues that this arrangement is far from optimal, stating, "It could be done better if there was a push to manufacture some of the equipment in India and facilitate technology transfer." Moreover, he calls for immediate action regarding the future of the sector: "Advanced packaging, or heterogeneous packaging, involves processes akin to fab operations. Currently, India is not engaged in it at all."

Decentralising Scale

The prevailing industrial ethos of centralisation and scaling has become an unnecessary vulnerability. Manickam advocates a decentralised manufacturing model, highlighting the risks associated with colossal factories. He notes, "In the past 30 years, there has been a push for centralising and scaling mega-factories, but they have become so large that their cash breakeven point is exceedingly high."

This model is inherently fragile; if utilisation drops by even 10%, manufacturing companies can become cash flow negative. He argues that, in light of current geopolitical fragmentation, pursuing large-scale operations with megafactories is illogical. The superior strategy, he suggests, is for state governments to cultivate ecosystems that enable companies to create value within these frameworks.

Raising Quality to Zero Defects

Products must always be reliable and never compromise in order to build trust around the world. This is the most important quality standard for big international buyers. Manickam talks about how strict the industry is: "Yields in the semiconductor industry are 99.9%, and the standard for quality is zero defects, or defects are measured in parts per billion."

Getting to this level of quality takes time and requires strict discipline in the factory. He stresses the need for a change in mindset: Indian factories need to stop taking shortcuts and start thinking about investing in automation and inspections. This culture of quality is an investment that builds trust right away.

The Product Pivot

The ultimate transition for India must be from a design services hub to a high-value product creation engine, where the highest margins and maximum autonomy reside. "The profits are highest for product companies," states Manickam. He emphasises that product companies leverage the existing ecosystem and "do not own any assets."

As the ATMP/OSAT ecosystem develops, these product innovators will naturally emerge. He asserts that Indian companies will gravitate towards profitable opportunities. To accelerate this pivot, he mandates two key interventions: first, conglomerate partnerships, whereby large Indian private sector players must take a proactive role. In addition to financial investment—which he notes they "have not done so far"—these conglomerates should adopt startups, providing them with practical support and market access.

The second intervention involves enhancing price competitiveness; since subsidies use taxpayer money, this capital should directly benefit local firms. Specifically, Indian chip companies should receive lower wafer pricing and reduced packaging costs for a minimum of five years. We need this strategic subsidy to maintain competitiveness until we achieve volume scales.

ATMP serves as a model for job work; it cannot operate as a product business. For it to achieve genuine success independently, the government must comprehensively define and fund local product development. Manickam proposes a strategic procurement policy that focuses on identifying sectors where India aims to reduce its dependence on foreign goods and services, such as telecommunications. He discusses the potential of 6G technology utilising NTN (Non-Terrestrial Networks) and states that this approach requires investment from various chip startups engaged in developing processors, RF components, power chips, and AFE chips.

To establish a fully homegrown system within three to five years, this approach requires investment from various chip startups engaged in developing processors, RF components, power chips, and AFE chips. We must apply this systematic approach to cameras, energy systems, data centres, and other relevant fields.

Engineering Sovereign Demand

The most dangerous phase for a nascent semiconductor industry is the "Valley of Death"—the gap between building a factory and finding a customer who trusts your output. Manickam argues that relying solely on global exports to bridge this gap is a strategic error. A new ecosystem cannot beat 30-year incumbents on day one.

Instead, India must engineer its own survival through "Captive Consumption." The logic is stark: India is digitising faster than any other nation, yet it builds this digital empire almost entirely on imported silicon. This dependency is a leak in the national hull. The solution lies in leveraging the state's massive buying power as an industrial lever. Manickam advocates for an "Aggregation Strategy." Consider the millions of smart energy meters, the explosive growth of two-wheelers, the digitising railway network.

If the government mandates that a fraction of this critical infrastructure runs on domestically packaged chips, it creates an instant, unshakeable market. This "baseload volume" is the oxygen that new Indian product companies need to survive their infancy. This approach does more than just fill order books; it fundamentally alters the design philosophy. It forces Indian companies to stop cloning generic global chips and start building "Solution Silicon"—chips specifically engineered for Indian use cases.

Talent Foundry

The ATMP industry demands a unique set of skills, particularly from highly skilled, hands-on technicians and process engineers. This role is markedly different from programming; acquiring the necessary skills requires substantial practical experience. Manickam highlights a new approach to training, stating, "Just as auto mechanics need engines to learn how to disassemble and reassemble them, we require the appropriate tools, methods, and materials for hands-on, practical training."

However, structured training should be viewed as just a starting point. Trainees are required to complete internships, similar to the expectations for medical students. After their training, they must gain real-world work experience to effectively refine their skills. Without opportunities that extend beyond formal training, their abilities may deteriorate rapidly. To retain skills effectively, individuals must have the opportunity to apply their knowledge of processes and tools immediately.