System-In-Package Ideal For Combat Aircraft And Missile Development

DW : How does a ‘System-in-package’ company like SI2 Microsystems fit in defense manufacturing?

Sanjay Soni: The main advantage of System-in-package is size reduction. This makes it ideal for areas like Combat Aircraft and Missiles where space is very limited and constant upgradation of functionality is required. For example, we are able to fit more powerful radars or better avionics systems in the same space as earlier using SIP. We are helping companies make the electronics in the missile lighter so the range of the missile can be increased or the payload increased with the same amount of fuel being carried.

DW : What are the major SI2 Microsystems’ products, applications and technologies in the Defense and Aerospace?

Sanjay Soni: SI2 Microsystems has products and applications which cover a large spectrum.  Some of these include: Products : Missile Test Benches, Portable Missile and Launcher Testers Applications : Space – in satellites (weight reduction), Aerospace – in aeroplanes, Missiles, Air Defense Missile Systems, Radars Technologies : SIP, Indigenisation and up gradation of Legacy systems

DW : What are the major hurdles SI2 faces in regard to Defense Industry requirements are concerned?

Sanjay Soni: There are several issues and hurdles being faced by private defense industry as a whole. Several policies are weighed heavily against private industry and especially SME’s. Companies in order to participate in procurement are expected to develop products at a No Cost No Change (NCNC) basis even though the products are specific to the requirement of the Defence forces and there is no mass market for them. There is no funding available for the project as well and the risk is entirely on the unit that takes up the work. The tendering process entails that at least 3 bids are obtained for the procurement, even when the said vendor has exclusively developed the product and there is no other unit available in the country, which is capable of doing the job. RFP is floated and the project is awarded to the L1 bidder even if they are not capable of actually delivering it. Sometimes at very low prices, which are not even viable. The L1 fails to supply and the project is either abandoned or re-tendered or the foreign supplier is given preference over the local suppliers with an excuse that there are no local vendors available for the said item. Due to the above policies the PSU’s and the Defence organizations get exposed to vendors who are not capable and thus form an opinion that the Indian companies cannot perform the job and foreign vendors are given preference. There is no culture of vendor development, which allows the local industry to grow their skills to meet the defence requirements. Also, Indian vendors can only quote in INR whereas foreign vendors can quote in US dollars. There is normally a high import component in any electronic equipment so if the Rupee depreciates, the Indian vendor takes a big hit as the PSU’s do not agree for any price escalation clause due to US Dollar increase.

DW : Which are the major companies SI2 Microsystems associated with?

Sanjay Soni: SI2 works with the Indian defence forces for indigenisation of critical systems as well as Upgradation of obsolete imported systems including radar systems, EW suites, air defence systems etc. SI2 Microsystems works with some of the leading names in the defense and aerospace sectors and our client list includes ISRO, MBDA, ELISRA, Honeywell, ADA, GE, Bosch, Bharat Electronics, HAL, Data Patterns, IBM etc. Some of the projects/ products SI2 is involved in:   Light Combat Aircraft Several ISRO Satellites Mirage upgrade project of IAF Agni/Akash Missile.

DW : How is the ODM (Design and Manufacturing) industry evolving across the world?

Sanjay Soni: The ODM industry is gradually moving away from a pure manufacturing services model to more of a design and manufacturing model. Even though ODM includes Design, the component of design in the overall project is miniscule. Most of the times it is build to print so there is very little design inputs which would come from the vendor. The customer provides everything down to the minutest detail. However, the industry is moving towards build to spec as customers are relying more and more on their vendors for design inputs as they would like to become leaner and outsource as much as possible. This is a trend we are seeing happening across the world.

DW : Can you describe any best fit for SI2 Microsystems in terms of partners, equipment or RFPs with regards to Indian defense?

Sanjay Soni: The best fit in terms of RFPs is wherein the client is asking for indigenisation and upgradation of legacy systems. We are partnering with various companies in the military space who have expertise in manufacturing equipment but need assistance on the electronics.