that new private companies will invest in a domain where probability of loosing money is extremely high provided govt is offering Risk Mitigation
Indian Electronics Manufacturing Developments : News, Updates and Discussions
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You still haven't understood the meaning of "strategic". What that means is cost consideration is secondary in comparison to actually possessing the capability.
Nor have you understood the pressure on our forex. Let me explain in a much simpler way. To the average consumer, the cheaper, the better. But to the govt, the less dollars, the better. So the govt won't mind if something costs $1.25 instead of $1 as long as that $1.25 is Rs 94 instead of $1.25. What it means is the govt will bring fab plants in, manufacture the same chip for Rs 94 instead of $1.25, even if the international market is selling it for $1. Which means the govt will simply raise tariffs by 30% to kick out imports. The fact is we are currently on a downward spiral when it comes to electronics imports, already $55B and counting. India's oil import bill was $102B last year. So, even if it means a massive loss, the govt has to bring in indigenous production. Unless of course, countries that manufacture these chips are willing to accept rupees instead of dollars. Simply put, EVERYTHING from A to Z of the semiconductor industry has to be indigenised because we simply CANNOT afford imports.
Anyway I'm referring to when our economy is going to be in the $7-15T range, with electronics being well above $1T in terms of imports. No one is planning to build a fab plant overnight. And you haven't considered either the forex or the strategic aspects of this program.
Oh yes. That certainly makes sense!! Btw, we are talking about Indian government, right ? It certainly has 10s of billions of dollars to throw away.
No offense dude. But isn’t it better if we can take a step back and think a little about whether any idea or suggestion is pragmatic or not ? Anyway, good luck to your fab dream.
He's only looking at it from a profit and loss PoV, without considering all of that technology can be taken away in an instant if we do anything they consider that's out of line, like invading and occupying Pakistan or creating a parallel banking process or conducting nuclear tests etc.
Dude. I am seriously not interested in your goal post changing game. And I certainly don’t need a lesson from you regarding semiconductor business. I manage multiple chips across the globe and hundreds of millions of these chips are shipped every year. So please spare yourself from typing such long posts which literally do not make much sense!! Last example of useless data from you post. 1T $ in electronics import ?? Just Google what is the total semiconductor industry revenue as of 2020!! Anyway I’m out of this conversation.
Wah, bhai. You accuse me of shifting goal posts, but don't know the difference between "electronics" and "semiconductor". The trillion dollar estimate is already at the lower end of the spectrum. Just so you know, the semiconductor sector is expected to be worth $35-40B in India by 2025, whereas the electronics industry as a whole is expected to be $250-300B at the lower end by then from the $70B today.
Just a heads-up, before you industry wallas get the news publicly, the govt will be clearing a proposal for a fully govt-backed Gallium Nitride-based fab whenever the economy picks up again.
India currently has 4 fabs, 2 of which are silicon fabs delivering products for defence, 1 is a GaAs fab for defence, and another is a research fab connected to a small production facility, which will expand into a large scale GaN fab plant, at least that's the latest proposal.
Another separate proposal is to simply buy foreign fab companies, silicon. Govt will know more by Feb next year.
So when the discussion is about semiconductor fabs, what exactly is the point of quoting $1T for electronic systems , if you meant that ?? This itself adds another feather to your goal post shifting track record.
Regarding investment in strategic sectors like defense, please read my earlier replies.
My opinion is strictly about fabs for consumer electronics.
The problem with our consumer electronics industry is that none of our Industry Majors ever ventured deeply into it if at all. However, all major industry names whether American, European or Japanese & off late the South Koreans have had major interests in consumer electronics once upon a time with some continuing to.
Even today we don't have any major Indian business house contemplating such a plan. The existing ones have all exited the scene or are on the verge of doing so viz Videocon, BPL, Onida, etc. Out of the old players only Voltas has re entered the CE market with Refrigerators & Washing Machines in collaboration with a Turkish company, of all the companies you can think of, which itself happens to be rather surprisingly, a top performer in European markets .
Then there was a grand announcement by Vedanta a few years ago announcing some sort of a mega entry into manufacturing of LCD / LED panels of which nothing was heard about later. This is the current state of affairs out here.
Unfortunately you are right. Look at our domestic mobile companies. Once upon a time Micro max was a dominant player and now Huawei, OPPO, VIVO, Xiaomi etc are completely dominating the market
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You are not keeping up with all aspects of the discussion then. Since we also spoke about the market and the economy.
GoI intends to make the entire end-to-end process indigenous. It's all under MeitY's PLI scheme. There are also two other programs called SPECS and EMC 2.0. All of these are connected. And of course there's the National Supercomputing Mission, and other strategic projects, like the new GaN fab. All of these are being led by MeitY and is being led by a handful of people. Now this is about the entire electronics industry.
When it comes to semiconductors alone, just this sector alone will become as big as our oil bill over the next decade, whereas the entire electronic industry will be at least 5-10 times as big as our oil bill.
GoI is taking a holistic approach to deal with this major upcoming problem. So, if the market is going to see a 90% share for low end smartphones that are below Rs 6000, then the main thrust is to give this market over to Indian companies. In order to do this, GoI is looking at profit and loss over the entire segment, and not just 1 or 2 parts of that segment. If you consider the proc in the phone is sold at a 20% loss, then the govt will subsidise that loss in exchange for taking a pie of the profits of the entire smartphone. So the company making the proc at a loss will get tax benefits and easy credit, whereas the company selling the phone will be paying a premium in terms of corporate taxes, and some of the amount will be passed over to the consumer in the form of higher GST to make up for the difference. For example, in the PLI scheme, the govt reduced cost to the companies by 6% somewhere, dunno where, but they raised GST from 12% to 18% to make up for that subsidy, so the overall cost was passed on to the consumer, but the costs have still remained low enough to make it viable. In the meantime, the local market is protected from cheaper imports through customs duty and other NTBs.
So the govt intends to use such a holistic approach to help create an end-to-end ecosystem starting with the low end segment which will slowly allow companies to climb up the chain over time based on their competencies. The reason why GoI can do this is because the Indian market is still in its infancy, whereas the capacity for R&D at this level exists as long as the investment is made. No other country has such an advantage. All other countries had to become advanced economies with saturated markets before creating advanced products. India is gonna do it as a lower middle income country. So India has the opportunity to create modern technologies while the domestic market is still growing out of poverty, which frankly gives India a very unfair advantage due to having both a large growing rich population that can absorb modern technologies, and a hell of lot of cheap labour growing alongside the rich, which creates a symbiotic relationship. India can have factories ranging from electronic sweatshops paying $1-4 an hour, like all those Apple products that are criticised in the West, to very highly paid scientists designing and producing high end processors within the same ecosystem using its own citizens. The same can't apply to anybody else.
India is going to make space shuttles, colonise the Moon, get a global/superpower level military etc, all before it becomes an upper middle income country sometime around 2040. Not even China can claim that, since they are already on their way to become an advanced economy over the next few years. GoI's semiconductor plan is simply taking advantage of India's unique situation of being able to deliver end-to-end solutions without having the need to cross the border.
BINGO!
Its petroleum all over again. Cann't have petroleum in India but we can import and refine and export the products.
Value addition chain is where the money is. A broadcom SoC may cost $10 or less. A broadcom SoC on a PCB in enclosure running our solution to count sheeps by their RFID tags is worth 100$ or more. Even better if the damn thing updates itself over internet and provides a cloud based portal to keep track of sheeps. You can charge by subscription of 10$ a month. Thats where money is.
That said some domains might make sense like solar cells or ultracaps. These are products that keep on giving money out of practically nowhere.
Well, there are even $4000 processors like Raptor Computing Systems::CP9M38 Intro
There may be even higher price processors but most are for workstations and severs.
They do not scale in same way consumer semiconductor does.
As I said earlier you are just looking at it from profit & loss angle ,it is a very critical industry from security point of view as well. Just look at china , if they are able to master latest fabrication technology and deliver a good processor cpu or mobile it will be serious competition to US. We are so dependent on these products that any american sanctions will bring our country to grinding halt. We will just go back to pre-90's.
I am not saying universities should set up foundries, there is no way they can do that on their own. But govt needs to do long term investment in university to work on such technologies. Semi-conductor industry can well be compared nuclear industry which requires govt help given that we are way too far behind.
Atleast now Tata is entering in the components manufacturing for apple and other OEMs and investing a billion dollar in tamilnadu.....
You want to use technology that is nearly 5-10 years old? why spend so much for it just buy the finished product then. Companies have moved on to 14nm bcos they are power efficient, better yields and to make profit. Simply put 65nm/32nm will not be profitable and sooner or later we will be shutting down or asking for 14nm to break even.
Yes thats the right thing to do , it is a very critical industry. Given that we dont have private players pitching in , govt should step in.
This is what china is facing now, they are importing most of the chips used in their products. They are virtually at the mercy of US and their allies.
China's Technology Imports Reach $449B, Semiconductor Accounts For 70%
The localization of science and technology in China has become more urgent due to frequent geopolitical issues in recent years, especially that the U.S. put many Chinese firms into its entity list, according to reports by Credit Suisse AG on Wednesday. Technology takes up 21% of China's imports...
www.chinamoneynetwork.com
We are in a position that is 10 times worse than china , in future it will become even more horrible as our economy grows. It will be just like 1960-70's food security, we will be at mercy of external forces.
IF 200 million people become rich enough to afford a new iPad in India each year, then we are looking at a bigger economy. That or cheaper knock offs of iPad or both.
What won't work is India subsidizes a massive fabrication ecosystem effort only to realize that it cann't offer the same prices as taiwan or china even while selling at cost price due to sheer scale of economies.
Actually this entire business of have a fab is a deja vu. It has happened before in 2000s.
Dont look at it from profit & loss point of view. It is just like space industry. We need to invest and kickstart the process so that private players later can take it forward. Amount of electronics that we are going to use in future will amortize that investment. If tmmrw china or US slaps sanctions on India then it will cripple our economy.
Its not possible to "slap sanction" on a commodity items like commodity SoC. You can deny technology but trying to ban sale of commodity items is very very very hard to implement. There are many ways it will get circumvented. Supply chains in this are pretty long. You can ban sale of SoC chips, but can you ban the sale of PCB with SoC mounted? Or PCBs with SoC mounted together in a knocked down kit? At one point or the other you realize, its too difficult to enforce such a ban.
What is a chip ban btw?
Any chip having a core that is designed in America?
Any electronic PCB having such a chip?
Any SoC having such a core with other cores?
How and at what point will you ban it? And how will you enforce it? Who is going to check every single SoC or every single PCB? How will you prove that someone has violated the ban? Who will police it?
If you try to ban Indian companies from ordering their SoCs getting fabricated in Taiwan, here is what will happen. Indian companies will go to one those SoC consultant services in South korea or Japan. They have their own standard SoCs which they will sell it in bulk at the process you select. You configure it, make a PCB and make your products.
Best you can do is what US is doing with Huawei. Ban sale of IP cores and software tools and put policies to deny access to market. But those bans are also becoming meaning less. Those are policy and technology bans and not product or manufacturing access bans.
One cann't legislate the reality.